Big Tech Companies Laid Off 327k Workers Over the Past 6 Quarters – Startups Are Already Scooping Up the Top Talent

Startups are being filled with some of the world’s best tech talent as ex-FAANG employees get absorbed into young companies and other industries. After global mass layoffs by major tech companies, startups have been on a hiring spree to get this well-skilled talent that is filled with experience and top-class work standards.

Big Tech’s Mass Layoffs Create Talent Pool

From the freedom to work remotely to the competitive salaries, these were some of the perks of working at Meta, Amazon, Apple, Netflix, and Google. Every software developer works with the hope that one day they will merit joining one of these companies just for the mere reputation that comes from it.

However, the last few years have crashed most developers’ dreams while killing others due to the mass layoffs that began throughout the industry. The industry came down from the 2021 post-pandemic hiring spree to deep cuts in thousands in the summer of 2022.

In 2021, the hiring market was candidate-centered with high salaries to attract employees. Unfortunately, by the start of 2022, the cost of doing business in general started to rise significantly along with inflation and a return to in-person interactions. This disrupted the demand for online services which had fuelled the growth of the IT industry as a whole.

Due to the need to balance the decreased demand for products with their expenses, the layoffs began. According to SignalFire’s State of Talent Report 2023, the tech industry saw 161,411 layoffs in 2022 alone.

Notably, top engineers were not spared, possibly due to the need to lower the amount spent on paying salaries. In 2023, the numbers rose to a staggering 166,044 in the first quarter of the year only.

Beyond FAANG

With such a flood of talent, unfortunately, the market has been unable to take up all of them. As of March 15, only 31% of those engineers list a current job on their LinkedIn profile, leaving 69% in the market for work.

Of the 31%, 28% were recycled back into other FAANG companies. Additionally, 6.4% have found roles in early-stage, pre-seed, and Series A businesses. While this might seem like a small number, it represents a massive 82% increase from the previous year.

Normally, Series A companies have been unable to compete with FAANG proposals for top talent due to the company’s size and low budgets of seed. Currently, 193 engineers are employed by more than 100 small businesses.

Unlike a few years back when engineers were more concerned with compensation, perks, and benefits, they are now looking for stability and a place where they can grow their careers in a sustainable way.

This informed the approach of Pandion Pro, a three-year-old e-commerce delivery startup, which has hired about 10 employees laid off by tech giants. The company’s CEO, Scott Ruffin, said that the size of paychecks isn’t a deciding factor for most laid-off tech workers Pandion had interviewed over the past few months.

Instead, “We’ve been able to attract some pretty high-quality talent because what we’re doing is different,” he added.

Government Gains from Tech Industry Layoffs

Another sector that has been benefitting from the market flood of tech talents is the government. Late last year, the US Department of Veterans Affairs(VA) was looking for tech professionals to fill 1,000 positions. According to the description, they would work on issues like updating benefit software and redesigning the scheduling of doctor’s appointments.

#SiliconValley isn’t the only place for #tech #innovation—explore the opportunities with the mission-driven, world-class organization of VA’s Office of Information Technology: https://t.co/XlUMzcCvU1 pic.twitter.com/ziT4eU733s

— Digital VA (@VA_CIO) November 30, 2022

“There’s this increased interest in public service. There’s obviously new headwinds in the tech industry that are leaving more people needing a job. And then there’s these great opportunities at the VA,” said Charles Worthington, the VA’s chief technology officer.

Normally, companies such as Google pay data scientists between $113,000 and $200,000, and software developers between $98,000 and $330,000. While this is extremely high, especially for a government organization, the VA has been attempting to eliminate the current 60 percent wage discrepancy between its roles and the private sector.

It will be a while before each one of the laid-off employees gets a new job. However, those who choose to enter other industries or compromise on things like high salaries for other important things such as the ability to make an impact will find new roles faster.

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