You won't have missed the news. After a decade of astronomical growth and a near-continuous bubble, big tech is not nearly so big. In fact it's undergoing a major down-sizing, with tens and maybe hundreds of thousands of layoffs announced over the last few months.
“Big Tech. Bloody hell,” as Sir Alex Ferguson might have said, had he been a tech watcher.
It didn’t all begin with Elon Musk chasing, rebuffing, refusing, litigating and finally settling on buying Twitter. Indeed, his net worth had started to take a hit midway through that process, as tech stocks in general started to go south earlier in the year. But part of his shake up at Twitter when he got there was to lay off most of the team.
And there is a link between events at Twitter and the almost-daily drumbeat of major tech firms laying off thousands of employees.
As covered by Steven Levy in this Wired article on how such layoffs may fuel the industry's future, the list of tech companies downsizing in large numbers includes Stripe, Intel, Robinhood, Lyft, Shopify, Snap and Meta. Meta and Amazon have ended relations with at least 10,000 staff each. At the time Levy was writing (way back in October) even Apple had announced a hiring freeze.
What does this mean for the legions of developers, coders, project managers and other techies? With such universal cuts across the industry, landing another job in big tech looks challenging.
Small tech's big moment
But what about small tech? Does this mean life is about to get easier for the kind of founder-led start-ups and scale-ups that are part of the Helm community? Many Helm members have spent recent years bemoaning the scarcity (and resultant high price) of talent. Levy’s prediction is that they may not jump into new jobs at all:
“I imagine hundreds of newly laid-off engineers, product managers, and designers are discussing how to launch new companies based on ideas they’ve been secretly hatching for months, while they toiled for companies now feeling insecure about their ad-based business models.”
This means that there may not be as many ex-employees flooding onto the market, chasing jobs with smaller scale-ups they wouldn't have looked at last year. But there will be some. Not every employee is a would-be founder.
These former employees of the likes of Amazon, Meta and Twitter will arrive in smaller companies with an interesting mix of tech start-up thinking and corporate experience. Jeff Bezos famously likes all his staff to "act like it's day 1" (for more on that, read this great article by Paul Simpson in Management Today)
More new businesses is good for the economy
Levy’s wider point about recessions being a good time for new businesses to form points to better news for Helm members. As Helm member and co-founder of the New Covent Garden Soup Company, John Stapleton, likes to remind people "If recessions are bad news for established players, they are an opportunity for founders and entrepreneurs".
And that opportunity may be too good to miss for all those would-be founders who had started side hustles while parked at home working for big tech. Now kicked out into the big, bad world, they may decide this is the time to "go big or go home". Funding may not be as easy to get hold of, but it isn't impossible for the right business in the hands of a smart team.
And here at Helm, as our members regularly tell us, the more founder-led scale-up businesses there are, the better. This is how we grow ourselves out of what otherwise could be a long and cold recession.