Many of the top technology companies are dumping their talented engineers. Is the time ripe for startups to strike?
Many of my portfolio firms struggled with recruiting last year. They had obtained substantial finance in a booming business, but all of the qualified engineers had been hired. With layoffs at firms such as Twitter, Stripe, and Lyft, the playing field has shifted. According to a recent Wall Street Journal report: Kathy Zhu said that she is recruiting applicants for engineering, customer support, and other positions at Streamline AI, the software business she co-founded two years ago. There are opportunities from “two or three organizations that have just had massive layoffs,” she added. Ms. Zhu said, “Due to these layoffs, there is a surplus of talent now.” There was no way we could have recruited such prospects a few years ago. It is a nice relief for entrepreneurs that have had difficulty competing with the giants. Many developers at Facebook were paid at least $500,000 annually. No new company can compete with it. However, Facebook is currently preparing for massive layoffs. That offer of $500,000 per year from Big Tech will not materialize. In addition to hiring freezes and layoffs, several tech firms’ stock prices have plummeted. Facebook’s stock price has fallen 75% from its all-time high last October. Last year, Facebook offered my pal a job. He refused, feeling uneasy about the company’s global influence. This was also a prudent financial option. His stock awards would be almost worthless at this time. The plummeting value of stock awards encourages Big Tech employees to depart for a startup. The golden shackles were unfastened. Who cares if you quit before your stock vests if it’s not worth much? However, despite the buyer’s market for engineers, startups will likely continue to hire in small numbers. The financial climate is challenging, and budget conservation is more vital than lavishing on talent. The greatest option for startups is to snag a few exceptional applicants who would have been impossible to get otherwise. Keep the remainder of the organization lean and mean. Is recruiting becoming simpler for your startup?
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