Startup hiring could gain edge over Big Tech layoffs

The mass layoffs that have hit IT workers in large US-based companies could provide an opportunity for tech startups that are looking to fill their ranks with skilled specialists. While the wave of staff restructuring processes might also hit Western Europe, tech workers in Eastern Europe are likely to be less impacted, and the region could continue to attract new investment and generate tech startups with scaleup potential.

By Ovidiu Posirca

Most of the layoffs are hitting companies that have reached unicorn and corporate status—especially those relying on the internet economy

Romania’s IT industry is still in need of around 15,000 new workers on average each year, according to data from the Software and Services Industry Employers’ Association (ANIS).

“As we have members ranging from startups to big multinationals operating on the local market, we also wanted to check with them as to whether they predict a contagion in the coming months, so we have just launched a pulse survey (the ANIS Sentiment Survey) that we plan to run at least annually. Though we don’t yet have the consolidated data, preliminary answers from our members have indicated a rather positive outlook for 2023, both for staff numbers and expected turnover for this year. In a nutshell, most companies expect their teams to grow this year, in line with revenues/turnover,” Corina Vasile, the executive director of ANIS, tells BR. ANIS members account for a total of over

60 percent of the local IT industry’s turnover, as well as for over 40 percent of the workforce.

Cristian Dascalu, co-founder and managing partner of Techcelerator, expects the wave of layoffs in the US to reach Europe, but to make most of its impact in Western Europe, because a significant part of the jobs will actually come to Eastern Europe.

Darkening Economic Outlook Fuels Layoffs

In the US, most of the layoffs are hitting companies that have reached unicorn and corporate status—especially those relying on the internet economy, which is slowing down following aggressive growth during the pandemic.

Carmen Sebe, the CEO of startup crowdfunding platform SeedBlink, tells BR that “unemployment among tech workers remains low; many smaller companies and startups are looking for talent and they are now in a better position to compete with Big Tech recruiters.”

In late January, Google’s parent company Alphabet said it would cut 12,000 jobs, representing 6 percent of its total headcount.

This would be the company’s single biggest round of layoffs amid worsening economic conditions.

Elsewhere, Microsoft announced at the start of this year that it would fire 10,000 employees in its biggest layoff round of the past eight years. The IT giant also cited the global economic slowdown as the main reason for the elimination of jobs.

E-commerce behemoth Amazon said it would reduce its headcount by 18,000 people, while business software provider Salesforce laid out plans to cut 8,000 employees or 10 percent of its global workforce.

Since the start of the year, over 120 tech companies have laid off a total of over 37,000 employees, according to data from Layoffs.fyi.

“The next couple quarters are really going to tell us what is really going to happen in the economy,” said WebEx CEO Chuck Robbins during an interview at Davos.

The risk of recession remains high for major economies as central banks have aggres- sively increased key interest rates in a bid to stave off inflation. In the European Union, GDP growth is forecast to subdue to 0.3 slowing down hiring staff, and cutting other expenses with tighter and more efficient budget control. The Romanian economy is platform for office leasing and marketing. It has already added local and international developers to its portfolio and it is looking to expand across Europe. percent this year, while Romania is expected to record an economic growth of 1.8 percent, according to an estimate by the European Commission, the executive arm of the EU.

“At the moment, startups are paying even more attention to recruitment as well as to efficiency and optimisation, and I think this is a good step to take. It minimises the likelihood of layoffs and it also helps companies adapt to the new economic reality,” she tells BR.

Startups that are looking for new talent are also noticing a mindset change among specialists, as people are less willing to define themselves through a specific job title. Instead, they want to become more relevant as professionals and focus more on their activities.

“People are increasingly looking to highlight who they really are, and this kind of self-identification helps startups. On the other hand, in tech, many IT specialists no longer want to go to the office, because at home, they can hack their time and work for the company where they are employed full-time but also take on collaborations on the side and work on 2-4 additional projects,” Techcelerator’s Dascalu notes.

On this backdrop, local tech hiring will have to adapt to changes in the demand structure. Sebe of Seedblink suggests that Romanian developers working remotely for companies abroad or those who are part of outsourcing companies working with Big Tech could be affected. However, they’ll have the opportunity to work more flexibly with startups or start their own tech companies as entrepreneurs. In turn, international companies could accelerate the opening and expansion of development centres in Romania, as costs are rather low, similar to those in countries like India.

“There is a general prudence in companies’ approach: freezing budgets for travel, expected to continue to grow in 2023, so we will not hear of any layoffs from big tech companies here, but we will see them having a cautious strategy,” Sebe adds.

Some Romanian tech startups have already conducted analysis to see whether they can maintain the current size of their teams, whether they can continue to hire as planned, and what they have to spend their time and money on in order to have the best results, says Ioana Gheorghe, People & Culture Manager at Bright Spaces Proptech. The startup is developing a SaaS

Skills Being Sought Out By Startups

The types of skills and personality traits that startups tend to look for are quite similar to those sought out by large companies, but people who are thinking of making the switch need to be aware of the specifics of an earlystage firm that moves at high speed and looks for accelerated growth.

“As a startup, you want to hire smart people who can get up to speed quickly, are constantly learning, are open to navigating ambiguity, are hardworking, have high integrity— and low tolerance for politics or lies, are empathic, and have a strong team mindset. A combination of business creativity and technical depth is ideal,” the SeedBlink CEO argues. She says there are a few ways in which startups can attract talent and keep people engaged.

First of all, remote working is here to stay, and talent can be kept through flexibility, responding to people’s desire to have more programmes generate increased employee retention, improved employee performance, and better product and service offerings. invested in it and will be more likely to stay with that company for a long time. control over their own lives. Second, their desire to get better and better at something that matters can be encouraged with learning and coaching opportunities. Startup job training

Dascalu of Techcelerator adds that entrepreneurs generally look for complementary skills when looking for fellow co-founders. This means that if you are a technical person, you will be looking for marketing people, product people, and people who know the importance of the diaspora. If you are a businessperson, you will look for more technical colleagues.

“The multi-disciplinary nature of the co-founding team (with backgrounds in business, tech, marketing, and product creation) is increasingly visible in many startups. In terms of choosing co-founders, but also other colleagues, it is essential to select people who are patient and understand that it will take time for the product to succeed, who are willing to go through ups and downs, face failures, reinvent themselves, and understand that every failure can represent a new opportunity,” Dascalu adds.

Startups also need to acknowledge people’s ambition to work on something larger than themselves. Lastly, employees who own stock in the company they work for feel more

One challenge startups are facing is keeping up with the level of pay offered by big companies. This can become an issue for early-stage firms that need to have a tight cost structure while looking to raise financing in tougher conditions.

“Though the limited financial offer may be viewed as a minor setback, we have seen how attractive it is for candidates to have a comprehensive salary package with benefits which are tailored to their current needs and wants, access to remote work, flexible working hours, constant support for learning and development, and a good and healthy work environment,” Ana Visian, marketing manager of job portal BestJobs, tells BR.

Communication and teamwork are crucial for Bright Spaces in its current development stage. At the same time, ambition and rapid learning are paramount for the startup in the recruitment phase.

“Other important skills and personality traits we are looking for are problem solving, adaptability, initiative and proactivity, enthusiasm for learning, and the ability to give and receive feedback. It is a mix between the skills needed for healthy and productive teamwork and the skills that help people perform well in a startup," Gheorghe of Bright Spaces adds.