Big Tech Layoffs: Why hiring will bounce back this year
By Ken Pettis. Ken is a Consultant at Zeren, on the US Go-To-Market Team specialising in Sales, Customer Success, Pre-Sales and Marketing hires for high-growth VC/PE backed tech businesses.
In the past, markets have been known to have their ups and downs, and the Tech industry is unfortunately not exempt from this fact. The end of 2022 was enough to make everyone nervous, but I have personally told people to stay calm. 2023 is expected to bring its own set of peaks and valleys.
2023 Tech to keep an eye on
Tech trends will continue to move toward a digital world. The top tech sectors remain 5G, AI, and Cloud-based companies. According to an article in the Harvard Business Review by Klemens Hjartar called “Prep the board for tipping-point technologies,” most companies are looking to move upward of 60% of their IT estate to the cloud by 2025. The large data migrations will affect most digital companies providing a B2B cloud base solution. My guess is that cybersecurity companies will also see an uptick with most companies keeping their energies focused on the risk and opportunity in the big shift.
The state of Big Tech
Big Tech are laying off a staggering number of workers and consequently has the industry out of balance, initiating concerns from many across the board. The tech industry has been showing signs of instability since Q2 of 2022 when we started to see several companies lay off and/or decline in Q3, Q4, and the start of Q1 of 2023.
As I mentioned, no companies are exempt from peaks and valleys. As the rest of the tech world holds on for dear life, enterprise companies will undoubtedly make their return to the giants they once were. Many companies are still growing as we speak and are expected to benefit greatly from their cloud base businesses according to Ray Wang in a Yahoo article written by Alexandra Garfinkle and published in early January of 2023 called “Big Tech will ‘have a better year’ in 2023, analyst says.”
Venture Capital and Private Equity 2023 investment
Venture capital firms and Private Equity firms experienced a noticeable decrease in investments dished out in late 2022, with most of the trend being focused on investment in their middle stages. Early-stage and later-stage investments saw most of the decrease in late 2022. However, it is not all bad news. Several funds were invested in with over 30 deals closing reaching upward to $190+ million in the Raleigh, NC area during Q4 of 2022.
Figure 1 below highlights the investment growth chart of Raleigh, NC. The mid-stage companies experienced a growth period while early and late shared a shrink in the market.
Figure 1 – Digital report by WRAL TechWire
This is a good indicator that the market is still experiencing growth in up-and-coming areas of the country. In early 2023, I think it’s safe to say we will continue to see several VC funds invested into the early-stage, start-up world with funds being already raised and ready for disbursement.
After the Layoffs, you MUST HIRE
The plus from getting the bad news first is you are usually more excited to hear the good news. The good news is that in 2023, the hiring market is expected to make a full recovery.
According to the article “41% Of Companies Plan to Increase Their Hiring Work Tech Spend 47% in 2023” written by Greenhouse, over 40% of the companies plan to add to their hiring or maintain their budgets from last year. That is putting the total addressable market for hiring “Work Tech” to around $244 billion by 2026. After the mass layoffs from “Big Tech,” I would say this is great news.
The A talent won’t last long
As most companies in the Tech space well know by now, that talent does not last long in any market. The layoffs have truly been “your loss and my gain” for most of the mid-tier companies in the space. My advice is to take advantage of the market as it has made a slight shift toward being more company-centric with the mass layoffs. For candidates, my advice would be to keep an open mind and as always be patient and make your next role decision as if the market is perfectly healthy. If we can all survive the Thanos snap, we can get through this.
The market will bounce back!
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