Startups find better access to talent as top tech firms cut headcount

When Briana Bell finished her job at and was considering a career change this year Salesforce When snapher approach to the market has changed from previous years.

With layoffs hitting the tech industry for the first time in over a decade and a hiring freeze across Silicon Valley, Bell considered his options. She ended up at her little-known private company, Everlaw, which offers cloud-based litigation software.

“I was looking at some of the big enterprise companies in the San Francisco Bay Area, and Everlaw was probably the smallest company I interviewed,” Bell said in an interview. .

This wasn’t the first time she had heard of Everlaw. The company originally reached out to her in 2019, at which point she chose to join her Salesforce as a senior analyst.

The environment looks very different now.

After more than a decade of free expansion, the tech industry has hit a major roadblock in 2022. Layoffs hit some big companies and others implemented hiring freezes. In November, Meta, Amazon, Twitter, Salesforce, and HP announced significant job cuts.

More than 50,000 technical workers were laid off in November, according to data collected by the website Layoffs.fyi. The cumulative total for the year exceeded 150,000.

Christopher Fong, founder of Xoogler.co, a network of former Google employees, said:

Lacking the stability that big tech companies once offered, employees are turning to start-ups and mid-sized companies that offer greater flexibility and, in some cases, opportunities for greater impact. I’m here.

Bell said many headlines about layoffs at the industry’s top companies played a role as she considered her options.

When looking at startups, she had to be confident in her business. This year’s crash in tech stocks and turmoil across the economy has dramatically reduced venture capital and completely frozen the IPO market.

“When I interviewed, I tried not to think too much about tech layoffs,” Bell said. But she conceded. Stands up and management is down to earth. ”

Rich Liu was hired as Everlaw’s Chief Revenue Officer shortly before Bell joined the company. Liu previously held the same role at TripActions, a high-value startup that provides travel software.

“From where I sit, I can really see that this market shift could usher in a prime time for top talent acquisition, especially for a maturing startup like ours. gain.”

Recruiters told CNBC that the tech job market is still competitive, even if employees are accepting fewer offers at a time than in recent years.

Lauren Ilovsky, Talent Partner of the alphabet CapitalG’s venture company, CapitalG, said it “made hiring a little easier” for the group’s portfolio companies, highlighting cloud data analytics vendor Databricks as still having dozens of open vacancies.

“They still have products that need to be built and shipped, so they need people,” Illovsky says.

Entering 2022, the tech giants still looked impregnable. All FAANG (Facebook, Amazon, apple, netflix and Google) saw all-time highs from June to December last year, and their dominant positions in their respective industries seemed all but secured.

All of them have been trolled this year to varying degrees. Facebook (now Meta) lost two-thirds of its value and announced last month that it would lay off 13% of its workforce. Amazon has halved and recently suspended corporate employee hiring. Netflix cut about 450 jobs in his two rounds of cuts, and Alphabet CEO Sundar Pichai told his employees in July that the company will slow down its hiring investments through 2023.

Megan Slabinski, president of the staffing agency West Coast, said: Robert Half.

Barry Padgett, CEO of customer data platform Amperity, agreed.

“It’s easier to retain talent now because we’re not getting 17 calls a day from recruiters,” says Padgett. microsoft.

Dave Merkel, CEO of cybersecurity firm Expel, said the 470-employee company plans to hire more than 50 people in the next few months.

“This time of year is usually not that busy for recruiters, but right now we’re seeing an influx of talent from these types of companies, so they’re very busy,” Merkel said. but they’re more interested, whether they’re nervous about what’s going to happen next year or they’re caught up in layoffs.”

Gully, a relocation startup platform, is so young that it has fewer than five employees. Founder Rachael Annabelle Yong, a former fellow at the Andreessen Horowitz-backed incubator Launch House, said she’s had some luck recruiting potential employees in recent months.

Yong said it’s a theme running through many of her networks.

“A lot of my friends are startup founders, and they all say it’s a really good time to hire,” said Yong, who started Gullie last year. “I recently spoke with people at big tech companies and they were all very open to opportunities in early stage startups, some even reaching out to us. is.”

Bell and other industry insiders speaking to CNBC said they’re looking for companies that offer stronger values ​​and a clearer mission, which is often lost over time. They also wanted to make a bigger impact than is often possible with industry giants.

“When I look at companies, I think about how much of the work I bring to this company can influence their go-to-market strategy,” Bell said. If they have roles, some of them don’t seem to have much of an impact on the company as a whole, especially as seen on Facebook and Twitter.”

Bell also said she was affected by emotional events in the past few years. I was doing it.

That “rekindled my passion for studying political science and policy,” she said, adding that she paid more attention to corporate values ​​when looking for a job.

In addition to the theme of racial justice and equality, Liu said during the Covid-19 pandemic, “it became important to look for companies with a mission that resonates personally with you.”

Amperity’s Padgett says the pandemic has changed the way people think about work.

“If you want something more exciting than sitting at home all day and feeling like numbers as part of a company of 100,000 people, you seem to be looking for like-minded individuals in a more personal setting.” says Padgett. “People are thinking, ‘In the spare bedroom he’s working his guts 12 hours a day, how can he make a bigger impact?'”

look: Meta Rises On Reports Of Layoffs