Tens of thousands of professionals have lost their jobs due to the tech bubble bursting, but several companies have launched huge hiring sprees to scoop up the displaced talent.
It’s been a brutal year for the tech industry. The tumultuous times have cost investors roughly $7.4tn in losses on the Nasdaq as not one of the 15 most valuable tech companies has generated positive returns in 2021. Microsoft has lost $700bn of its market cap and Meta has lost over $600bn.
Several factors have contributed to the bear market. Russia’s illegal war in Ukraine is one factor. In response to international sanctions levied against it, Vladimir Putin’s regime has responded by cutting off Europe and the West from its supply of natural gas, pumping up the prices on oil and natural gas in the process.
Russia and Ukraine also supply about a third of the world’s wheat and barely as well as 70% of the planet’s sunflower oil. As the war rages on, global food shortages worsen, which propel prices for available food to new levels.
Then there’s the hangover from government spending during the pandemic to save jobs and lives. While those expenses can be understood, governments are now paying the bill.
Some accuse the Federal Reserve of having kept interest rates too low for too long during the hyped up and empty growth seen over the past two years. Its rush to raise and keep interest rates high can in many ways to be interpreted as an over-reaction to its policies over the past two years.
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Some more hawkish market watchers believe these factors will contribute to hurling the US and other markets into a recession over the next few months.
Tech funding drops and puts a stop to hiring of new talent
The tumbling markets and interest rate hikes have choked off access to easy capital, and soaring inflation has made all those companies promising future profit a lot less valuable today.
Funding in the tech industry has run dry in 2022. This year, the global industry has only raised north of $602.7bn across 19,050 venture financing, equity offering, private equity and debt offering deals, according to research firm GlobalData.
That is dramatic drop from the $1.5tn secured across 26,230 capital raises in 2021. It is also below the $765.4bn and $1.2tn secured by the sector in 2019 and 2020 respectively.
Tech leaders, like online shopping giant Flipkart's CEO Kalyan Krishnamurthy, believe the funding crunch will continue over the next 18 months at least.
The number of open roles in the tech industry has dropped steadily across the globe over the past year, according to data from GlobalData.
Back in November 2021, at the peak of last year's bull market, there were 591,955 active tech roles posted across the global industry. By the same time this year, that figure had dropped to 390,788 active roles.
The industry is also advertising fewer roles. In November 2021, there were jobs being posted 225,506. That figure has plunged to 96,179 posted roles this year.
First came the hiring freezes, then the tech talent layoffs
Tech talent should've taken the hiring freezes as a warning. They heralded the wave of mass-layoffs that has swept in across the industry. Just like the volatile market conditions, the tsunami of redundancies have many causes.
One factor behind the mass-layoffs in the tech industry is that many companies were too bullish in their hiring during the pandemic. Many corporate chieftains, like Meta's Mark Zuckerberg, have blamed their staff cuts on themselves, saying that they were too optimistic in their growth plans during the coronavirus crisis.
"Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended," Zuckerberg said in a statement. "I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that."
Other firings just seem callous. Elon Musk, who ended up buying Twitter after months of back and forth, kicked off his reign as new chief twit by sacking half of the social media giant's workforce. The sackings were made via combination of emails and by telling staff that if they didn't opt in for "intensity" then they should consider themselves without a job.
The mass-layoffs at Twitter are likely to add to Musk's regulatory headaches. He is already tussling with US Securities and Exchange Commission over an order for him to seek approval from Tesla before tweeting about the carmaker. The "muzzle", as the Tesla CEO calls it, was introduced as part of a court settlement after Musk joked in 2018 that he’d take Tesla private at $420 – a reference to the weed-smoking culture.
The chief twit is now facing a class action lawsuit as former Twitter employees claiming they didn't get enough notice before he fired them. The European Union has also flagged that Twitter closing its Brussels office could result in added oversight from the European Commission. Staffers at the office focused on European polices, potentially putting the company at risk of failing to comply with the new Digital Markets Act.
Then there are the companies that aren't firing staff, but are actively ceasing to exists. Promising startups like cryptocurrency exchange FTX and autonomous vehicle startup Argo AI have imploded this year, leaving droves of tech talent ready to be scooped up by competitors' hiring managers.
However, one company's loss is another company's gain. Several tech companies have eagerly been ready to scoop up the fired workers, hoping to benefit from their skills and experience.
Social media giants like Meta and Twitter fired tens of thousands of employees in November. Now, a lot of that displaced tech talent could find themselves working for TikTok as the venture is still actively hiring new staff.
The China-owned social media company has said it remains committed to hiring nearly 1,000 engineers to its Mountain View office in California, CNN reported in November.
The hiring push is part of TikTok's goal of ensuring that US user data is overseen by a team based in the States in a bid to ease the scrutiny from Washington caused by its parent company ByteDance's ties to Beijing.
Musk has faced a lot of criticism for his Twitter takeover. Some firms have leveraged the backlash to draw attention to their own hiring initiatives. Software developer HubSpot was one of them.
Following reports that Twitter had fired employees daring to disagree with the chief twit, HubSpot's chief people officer Katie Burke offered a cutting rebuke, offered an alternative approach and noted that she was looking for new talent.
"Last week, an engineer at HubSpot criticized our exec team on something," Burke wrote on LinkedIn. "We thanked them, asked them to pull together a document proposed solutions, and I apologised for one particular thing I think I in particular messed up.
"As a leader, getting criticised is part of your job. Great leaders recognise debate and disagreement makes you better and is part of the process. If you want a place where you can disagree (in a kind, clear manner of course) with people, HubSpot is hiring."
HubSpot is currently trading at a $14bn market cap.
HubSpot wasn't the only company to react to Musk's brutal defenestration of thousands of tweeps. In response to the mass-sackings, Amanda Richardson, CEO at recruitment software firm CoderPad, inked an open letter to displaced Twitter talent.
"I see you," she said. "I believe in you. I believe that great work can be accomplished from your laptop - no matter where it physically is. I believe commitment and care doesn’t come from hours but from impact. I believe that working moms are some of the most dedicated, efficient and strong leaders I know. I believe that people with commitments to kids, parents and hobbies bring richness and perspectives that build better products.
"I believe that this shit show explains why only 21% of employees at Tesla were women two years ago - and that no one cares about that minority group. And I believe that it’s only getting worse for women. I believe that the past few months have been terribly frustrating, depressing and demotivating."
Richardson called on the tech industry to become more fair and diverse, a place where tech talent is "hired based on your skills - not your zip code."
"We are hiring," Richardson concluded. "We are hiring engineering leadership, sales leadership, and other roles. Please reach out - from your living room. Cause that’s where we all work too."
Wise is just coming out of 18 action-packed months. First, the money transfer fintech formerly known as TransferWise listed on the London Stock Exchange with an £8bn valuation on its first day of trading in July 2021. The public debut strengthened the trust in London as a destination for tech listing, something the Big Smoke was in desperate need of following the lacklustre public debuts of food-delivery startup Deliveroo and cybersecurity firm Darktrace.
Then the co-founder of Wise, Taavet Hinrikus, joined a team of successful tech entrepreneurs that aimed to unleash the potential of Europe's tech industry. Plural is, by the looks of it, an investment platform where experienced entrepreneurs could share their knowledge and money to other platforms.
Wise has also made it clear that it is still growing. At the time of writing, the fintech firm has over 300 open roles across its different offices.
Wise is pushing to grow as the overall fintech industry has been caught in the same headwinds that have uprooted the rest of the tech industry.
Contrary to many of its fintech peers, UK neobank is actively hiring. The challenger bank had over 200 open roles on its career page as of November 28 and plans to grow its workforce by 20%.
"We are hiring in the places where we believe [it will have] the most significance in order to allow us to keep this growth momentum," Yuval Rechter, US general manager of Revolut, recently told Verdict in an exclusive interview.
Revolut’s crypt general manager, Emil Urmanshin, has attributed the neobank's growth to the startup's expanding crypto plans, saying the challenger bank views “crypto as a long-term play and remain bullish on the industry”.
The digital lender has also upped the ante in its efforts to conquer the US market. In 2021, it embarked on a quest to get a banking license in the States. Getting one would allow it more flexibility and enable it to do business without having to rely on the services of a licensed partner bank. It has also increased its US marketing efforts this year.
Revolut most recently raised money in July 2021, achieving a valuation of $33bn.
Revolut rival Monzo lists 38 open roles on its careers platform. That builds on the some 500 roles that Monzo hired over the past year, which saw its labour costs jump by 38% to £130.2m, making it the biggest drag on its bottom line.
Monzo’s pre-tax losses for the 12 months to the end of February narrowed to £119m from £131m in the previous financial year, according to the bank’s latest accounts published in its annual report in July.
The roles that the neobank is currently hiring for includes the position of US CEO. For those in need of a Monzo history refresher, that's the role the current global CEO, TS Anil, held before stepping into the top job following founder Tom Blomfield announcing plans to step down at the start of 2021.
Anil was was replaced as US CEO by Carol Kobuke Nelson in February 2021, a role she stepped down from in February this year.
Since taking on the global CEO role, Anil has been focused on building the "Monzo not just for today, but for the big global ambition that we have."
In an interview with the Financial Times in July, he said that the company was focusing on the long-term growth of the company, hoping to break even by 2023
In contrast to Revolut, those growth plans did not include cryptocurrencies. Instead, Anil hinted to the FT that it was looking into launching a retail investment platform.
The digital lender most recently raised money in December 2021. Abu Dhabi Growth Fund led the $500m funding round that pushed Monzo's valuation to $4.5bn. The challenger bank had previously suffered a down round in 2020 that slashed its valuation from $2bn to $1.24bn.
Quiet Platforms is based out of Devens, Massachusetts. The company provide logistics solutions that enable retailers to respond to rising online shopping demand. As a result of meeting that demand, the company is hiring.
“We’re growing rapidly because our shared logistics model and nationwide fullfillment network help retailers and brands optimise their inventory positioning and ship more cost-effectively without having to make additional investments in building out their own supply chain infrastructure," Shekar Natarajan, the company’s president, told Forbes.
Jaguar Land Rover
Jaguar Land Rover has created a special platform to scoop up tech talent who. In a release on November 18, the UK-based automaker said it was inviting "displaced workers from the tech industry to explore career opportunities" with the company. The carmaker has about 800 jobs available in the UK, the US, Ireland, China and Hungary.
Based in Ireland, ESW helps retailers and brands expand their DTC businesses globally. Patrick Bousquet-Chavanne, president and CEO of ESW Americas, told Forbes in a recent interview that the company continues to thrive in the current environment because brands are seeking to grow their DTC e-commerce businesses in new international markets as their domestic sales slow.
London-based healthtech startup Lantum has several open vacancies on its website. The company is designed to help "healthcare organisations to manage their workforce as well as connect them with a large network of thousands of healthcare professionals who can find additional work on flexible terms."
The startup most recently raised money in March 2022 when it secured $15m in growth capital.
GlobalData is the parent company of Verdict and its sister publications.