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Some tech leaders are turning layoffs and hiring pauses into opportunities


A man walks past a “We’re Hiring” sign posted in Arlington, Virginia on June 3, 2022.

Olivier Douliery | AFP | beautiful pictures

Recent headlines have been flooded with news of tech sector layoffs, hiring freezes, and job offers pulled amid economic uncertainty.

But according to members of the CNBC Technology Executive Council, hiring won’t slow down, and finding the talent these companies need won’t get any easier.

Nearly 32% of tech leaders who responded to a recent survey say it is becoming “more difficult” to qualify people for their open positions; an equal percentage reported that it became “significantly harder” to find the talent they needed. The most recent 6-monthly survey of TEC members was conducted between June 3 and June 22.

Over the past few months, more and more companies have painted a completely different picture of what the labor market looks like. Companies include Uber, Metaand Microsoft announced that it is slowing hiring as inflation picks up and the recession intensifies.

Meanwhile, Redfin, Netflix and Klarna are among the companies that have announced layoffs. And in the complete reversal of the white-hot job market over the past year, Twitter, Redfin and Coinbase are canceling the job offers they have given, citing the economy in turmoil.

It’s a dangerous strategy to use, says Brian Kropp, vice president of human resources research at consulting firm Gartner.

“It looks awful and it sucks to cancel job offers,” he said. “So many of these companies have spent a tremendous amount of energy talking about their values ​​and how they’ve built a more human organization with additional support for things like mental health. Then go back and cancel the job offer to get basically little financing, Kropp added.

“It doesn’t just affect the people who don’t currently have the job they’re offered to, it affects all of your other employees who are thinking ‘If the company does this to someone they already have. having trouble interviewing and hiring, what does that mean for me?'”

One chance only

Survey participants said the turmoil in the labor picture is a one-of-a-kind opportunity. While nearly a third believe they will likely need to adjust their headcount next year, 55% said the labor market turmoil gives them the opportunity to attract top-level talent. high that they may not be able to attract.

That is certainly the case for Thanh Nguyen, founder and CEO of the benchmarking startup OpenComp. He said his company’s human resources “have never been better” and that he is seeing significantly more applicants than he was competing for before the news of the layoffs started. happen. “I think some candidates we wouldn’t see or even get a chance to interview, but now we can,” he said.

86% of TEC members indicated the need for higher wages to acquire skilled talent. Tech employers told CNBC that despite the headlines, the job market in the tech sector remains hot, with worker sitting in the driver’s seat.

It is likely that the combination of that offset will begin to change. According to Nguyen, the combination of equity and cash has long been the norm for payment packages in the technology sector.

“But what we are starting to see is earlier stage companies are less cash-positive and more equity-positive on job offers because their cash burn is very important”.

Compensation could change even more next year, Nguyen said, as a potential recession will reset labor costs as more people stay in the position longer. “As people moved around, it increased compensation by 10% to 15% across the board,” he said. “During a recession, labor costs will start to stabilize.”



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