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Last week, Coinbase Senior Product Manager David Hong wrote on LinkedIn that he got up at 4am to get ready for a meeting when his MacBook suddenly turned off. He later found out that he was part almost 20% of the company was laid off due to what the company’s CEO called a looming recession.
“When I joined Coinbase, I realized that working in this industry would be risky,” Hong wrote in a LinkedIn post, “me/my team was safe.”
When Coinbase announced its layoff, it created a wave of concern not only in the crypto industry, but also in the wider tech world.
But recruiters wasted no time commenting on Hong’s post and others like him with job offers for their companies.
While Coinbase was one of several companies to announce layoffs in recent weeks, recruiters and others involved in tech hiring tell CNBC they are more of a departure from the rules. Even after months of plummeting stock prices and inflation in the US economy as a whole, companies in the industry are still desperate for talent.
Microsoftfacebook parent Meta, Nvidiaas well as Click have all announced plans in recent weeks hire less vigorouslylike inflation, have you been in Ukraine, and the ongoing impact of Covid-19 around the world has worsened the outlook for the rest of the year. Venture capitalists are warning their portfolio companies prepare for the dark times and some startups fire people or store closure.
But experts say the cuts are still isolated.
“Layoffs seem to be common for businesses that are in a more precarious financial position, for example if they are unprofitable and funding has dried up, or if they simply don’t have the runway to continue operating without additional funding,” said Daniel Zhao. , senior economist at Glassdoor, a site job seekers use to evaluate potential employers.
Zhao added that several companies are “reading the economic teaspoon and stepping back in uncertainty” rather than necessity.
In the acclaimed Netflix series layoffsthe company took action after announcing its first loss of a subscriber in a decade. Most of the roles affected were non-tech and based in Los Angeles. Most of them are managers or “facilitators,” according to California state documents reviewed by CNBC. The company also still regularly posts job postings every week.
But for most of the industry, it’s business as usual, experts say. They are still hiring and they still have a shortage.
“You can’t talk about mass layoffs in tech because it’s so isolated,” said Megan Slabinski, district president of human resources consultants Robert Half. “I don’t think the demand for tech-related positions will suffer for the foreseeable future.”
“The crypto companies that seem to be run by school kids who think they’re going to take over the world are the ones that are slowing down,” said Valerie Frederickson, founder of executive search firm Frederickson Partners, an insurance and risk division. management company Gallagher. “When VCs send out letters saying, ‘Hey boys and girls, it’s time to slow down buying foosball tables, it’s time to get serious here,’ that’s what happens to these groups.”
Experts also pointed to examples such as report Earlier this month, Reuters reported that Elon Musk wanted to cut 10% of jobs at Tesla, citing a “very bad feeling” about the economy. Musk returned later, saying Tesla’s layoff announcement would only affect about 3.5% of total headcountstating that the actual amount was “not super tangible”.
“You can lose a lot of market credibility if you make reflexes that could damage your employer brand,” said Lauren Llowsky, talent partner in Alphabet’s growth-stage venture capital division, CapitalG.
Slabinski says that one in ten calls she receives are related to economic issues, but most of them are employers hoping to see if new talent is emerging. According to experts, candidates receive several offers at once.
“When the headline comes up, I get a call from the company saying, ‘I see these are layoffs, is this the time I can get better access to talent or ask for more qualifications than a few months ago?’ Slabinsk said. And my answer is: No.
Slabinski says the company’s recent report shows that 52% of tech workers still want to retire or look for new opportunities within the next six months.
“We are seeing a slight decrease in demand for technical workers, but the level is still much higher than it was before the pandemic, and companies are still desperate,” Zhao said.
HR departments in companies that touch the tech ecosystem are also in high demand. “A lot of tech employers come to us and ask for four to six different HR requests at once because they have such a big need,” Frederickson.
“Workers still have the leverage to demand better conditions, but instead of office perks like free lunch and ping-pong tables, tech workers are looking for remote work and flexibility,” Zhao said.
“Right now I have a lot of talk about the trade-offs between going public or private,” Capital G’s Ilovsky said. “The most common topic is, ‘Should I go to Facebook, Meta, Apple, Netflix, etc. low stock price, knowing that it will hopefully rise again? Or if their shares in a big tech company are underwater, they say, “Should I go private?”
They also use their leverage to keep employers in line, experts say.
“The candidates are asking really tough questions that the founders haven’t had to answer in the last few years,” Llowsky said. “Things like ‘Are you planning to take the round down?’ “Are we on track to fulfill our council’s plan?” or “Are you ready to work with the headwind of the market?”
Some companies, however, are taking a break or overestimating what they need.
Illowski said she advises all concerned employees to “wait” before doing anything. Companies, she says, are doing the same, albeit on a smaller scale.
“When things went awry, it wasn’t oh, s—!” point, because they’re still on an upward trajectory,” llovsky said. “It was more of a reassessment of how growth might please a degraded market, like “maybe we’re investing more in development than marketing.” Or the company says, “Instead of putting all our energy into a product in 2026, we will focus on our core product.”
In general, however, they are afraid to take any big steps, fearing they won’t be able to re-hire employees when they need them. “They think it’s going to be like Covid where some companies slow down recruiting and then have to play catch-up and that puts them at a disadvantage,” Frederickson said.
“Their memory of recent history is they don’t want to go back into the 2021 job market,” Zhao said of the companies. “They played catch-up after Covid and kept up with the absolute frenetic environment that followed and the struggle to get back to work quickly.” Ilovsky said.
Some experts believe the extra break will ultimately benefit an industry that has bloated in recent years.
“I wish I could slow down a bit to make it easier for my CEOs and boards to hire good HR leaders so they don’t have as many offers, but unfortunately I didn’t see that at all,” Frederickson said.