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Why tech giants lay off highly skilled workers
The world is heading into recession - some believe that we are there already. Despite the fact that we are yet to officially acknowledge it, a number of tech giants had made tens of thousands of people redundant in the past 6 months.
On the other hand, most companies - public and private, are already finding ways in which to tackle the talent shortage that is becoming more of a problem with each passing year:
If this is a problem already, then why do tech giants - some of which are in the top 10 wealthiest companies on the planet today, lay off skilled workers by hundreds and thousands rather than protecting and trying to retain them?
In the tech world, continuous growth is one of the fundamentals of its economy - even if your annual revenues are counted in billions of dollars. While it’s a characteristic rather than a problem, it goes back to the very concept of the modern tech company: great ideas turn into start-ups with some capital and then explode into scale-ups mostly with an injection of cash from investors. Always growing, anything but growth is a problem.
And the way these companies grow is by sacrificing a chunk of their revenues/profits and reinvesting them back into their own company, often in form of staff expansion - much like start-ups, knowing that a proven business model will return these costs and far more, in time. There you hire for the future, not for the ‘now’.
These attempts at expansion-fuelled growth are based on aggressive forecasts - the most recent being the pandemic. During that time the way we live our lives changed drastically - while many companies suffered, tech giants enjoyed an unexpected surge in popularity and therefore hired accordingly, anticipating a more accelerated growth. It’s not how it turned out, however. Much of the pandemic popularity dispersed when people returned to work and paired with recent global issues such as increasing costs, political uncertainty, and economic downturns, tech giants were forced to re-forecast and thus get rid of the workforce hired in anticipation of the originally more-optimistic future.
In short, they over-hired hoping for growth that wasn’t to be.
How do layoffs in tech affect the rest of us in recruitment?
Most importantly - the global pool of available talent just got enriched by tens of thousands of highly skilled candidates that have worked for some of the world’s most recognizable names.
Companies, regardless of whether big or small, should not shy away from this talent - many of those people have ended up being made redundant despite the fact that they worked for some of the world’s biggest names in tech: companies that as it turns out, couldn’t provide job security one would hope to get.
They might as well be inclined to work for companies that don’t employ tens of thousands of people but where they can have a bigger impact and not be just numbers that are disposable when forecasts change.
Many of those workers are something you’d call elite talent - they’ve worked on a product successfully used by millions, have experienced firsthand what ‘success’ looks like, seen structures of global tech companies, and contributed to its growth. The value of hiring such talent for a small or medium-sized business can be huge and the experience they’d bring in with them is invaluable.
To truly take advantage of the situation, it’s important to be open to the global hiring concept - maybe even fully remote, particularly when it comes to tech positions - these people are the backbone of product and everything digital and one can never know where the perfect candidate might reside.
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