To Hire or Not to Hire

Reflecting on recent years, we've all had our ups and downs, and the tech industry is no exception. Earlier this year, fueled by massive cash injections and unprecedented growth in certain sectors (i.e., those responding to the pandemic’s reshuffling of just about everything), startups were hiring at a rapid clip. But now, we're hearing of tales of job offers rescinded, and layoffs are being announced everywhere. We’re looking at where layoffs are concentrated and where the power balance seems to lie in this new market.

  

Across the board, from early-stage companies to household names like Meta and Apple, companies are attempting to tighten their budgets to pre-pandemic levels. According to data from Trueup, tech layoffs are concentrated in three main areas: fintech, crypto, and real estate, all industries that saw rapid growth during the pandemic. Amount laid off 18% of its workforce, On Deck cut 25%, and Klarna let go of 10%.

Power dynamics appear to be shifting away from employees, who got used to calling the shots. Where previously employees had advocated for and gained flexibility on where they worked (home, office, or an island in Mallorca), more companies are calling people back. Tesla’s founder Elon Musk tweeted his sentiments about bringing employees back to the Tesla offices, where only 43% of its employees currently clock in.

Still, recruiters, who have boots on the ground, say the slowdown is concentrated and not a general rule. They’re still seeing competing offers for in-demand skilled workers. The upward trajectory in salaries, however, is abating, in favor of higher equity incentives for new employees. Meanwhile, companies are cropping up to expand the hiring landscape, making it easier to hire foreign employees, like Deel and Remote.com.

It seems, for now, that diligence is back in style for both employers looking to hire and investors looking for outstanding startups.