Many top tech companies are dumping talented engineers. Is it time for startups to pounce?
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Last year, I watched many of my portfolio companies struggle with hiring. They had raised big funding rounds in the hot market, but good engineers were all spoken for.
With layoffs at companies like Twitter, Stripe and Lyft, the game has changed. From a new report in The Wall Street Journal:
Kathy Zhu said she is lining up candidates for engineering, customer service and other roles at Streamline AI, the two-year-old tech startup she co-founded. They include prospects from “two or three companies that just had big layoffs,” she said.
“There’s an abundance of talent right now, because of these layoffs,” Ms. Zhu said. “A few years ago, there was no way we could’ve attracted candidates like this.”
It’s a welcome reprieve for startups that struggled to compete with tech giants.
Facebook paid $500,000 a year or more to many experienced engineers. No startup can compete with that.
But now Facebook is planning huge layoffs. That $500,000 a year offer at Big Tech isn’t happening.
In addition to frozen hiring and layoffs, many tech giants’ stock has been crushed. Facebook’s stock is down 75% from the peak last fall.
Facebook offered my friend a job last year. He declined, uncomfortable with the company’s impact on the world.
That also proved a wise financial decision. His stock grants would now be almost worthless.
The value of stock grants falling off a cliff makes Big Tech workers more willing to leave for a startup. The golden handcuffs have been loosened.
After all, who cares if you leave before your stock vests if the stock isn’t worth much anyway?
But despite the buyer’s market for engineers, startups will likely keep hiring limited. The funding environment is difficult, and preserving cash is more important than splurging on talent.
The best option for startups is to snap up a couple of top candidates you could never have gotten otherwise. Keep the rest of the business lean and mean.
Is hiring getting easier for your startup? Leave a comment at the bottom and let me know!
More on tech:
Bridge Rounds: The Path to Riches?
VC’s Sour on China — Funding Down 44%
The First Time I Used the Internet
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