Expectations of rapid economic recovery following the hiring boom in 2021 and early 2022 were overly optimistic. Like the stock and cryptocurrency markets, the talent acquisition space is sensitive to economic changes. Over the past two years, we’ve seen real examples of how external market dynamics can change everything. Drastically.
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A brief explanation of the nature of the layoffs
When companies expand, they need more talent, which was evident during the final stages of the Covid-19 crisis. Increased demand for talent put pressure on recruiters, who were tasked to rapidly scale commercial and technical teams. Limited talent supply on the market, the ongoing pandemic, and the “great resignation wave” made hiring teams very uncomfortable.
In the second quarter of 2022, the market cooled down due to the ongoing conflict in Ukraine, energy shortages, and the resulting rise in inflation. This led to a slowdown in revenue for many organizations in the technology sector. It’s important to note that the tech sector, mainly companies funded by venture capital, is not generally representative of the broader economy.
Bootstrapped organizations (self-funded) don’t rely on outside investment and are less likely to make redundancies as they are either already profitable or have a clear plan to achieve profitability. Startups that raised money at high valuations are now finding it difficult to raise more money, and their only option for survival is to become profitable, usually by cutting costs (headcount) and/or maximizing revenue from proven products.
With hundreds of companies shedding staff, sensational headlines make it sound like a tech bubble has burst and the entire industry is about to collapse. This will not be the case in 2023.
Let’s Reinvent Talent Acquisition and Workforce Planning! acework has teamed up with our partners at torq. people to assess current market conditions, and together we built a brand new whitepaper exploring the mass layoffs from an HR and talent acquisition perspective.
✅ Why did mass layoffs 2022/23 happen?
✅ What are the key learnings for people ops and talent acquisition?
✅ How to grow headcount sustainably and optimize the workforce strategically?
✅ What are the recession-proof industries and jobs?
📥 Download the whitepaper for free by clicking on the image below.
💡 You may also want to check:
Tech Salary Benchmarks 2022
How to set a Compensation Strategy for Hybrid Teams