So far in 2023, big tech layoffs have amounted to 308,699. That's 1,966 people losing their job per day.

In 2019, big tech went on a recruiting spree, hoovering up a significant portion of the talent in the market. Startups struggled to attract and retain the right talent as workers succumbed to the bright lights of big tech firms, which were offering big salaries, exciting perks, and the opportunity to work for a household name.

However, given the size and scale of recent layoffs, people are now questioning the stability of the largest players in the market.

While it’s never good to see people lose their jobs, it does present an opportunity for startups. With an increased depth to the skilled talent pool available, smaller tech firms can now hire talent which would have previously been unattainable.

Startups can offer these candidates the opportunity to play a bigger part in the company which many will see as a much more rewarding role.

Startups also benefit from having highly skilled recruits who need much less training and less time to get up to speed, meaning they can hit the ground running and make an impact early on.

Over-hiring and firing

From 2019 until early 2022, big tech was on a hiring spree, recruiting the best talent in the market.

In the space of two years, Meta nearly doubled its employee headcount, from 48,268 employees in March 2020 to beyond 80,000 by September 2022.

This was because demand for their products and services grew exponentially during the pandemic as many adjusted to working from home. Big tech firms were overly optimistic that this level of demand was the new normal.

The reality, however, was that this period was an outlier with demand falling. On top of this, in 2022, volatility and uncertainty hit the market. The inflation rate hit its highest level in 40 years according to the US Bureau of Labor Statistics, the cost of living jumped significantly, and people and businesses had to make cutbacks.

Technology companies were also impacted by the economic downturn and so had to cut back. One of the first levers companies pull to cut costs and survive during difficult periods is to lay people off.

The number of layoffs in the tech industry hasn’t dropped off. The total number in 2023 thus far has already surpassed the entire total from 2022, the highest number since the dot-com bubble, according to The Challenger Report.

Meta alongside other tech giants such as Google and Microsoft have since admitted they over-hired.

A change of tack for startups

It’s not all doom and gloom as startups are now taking advantage of this new recruiting opportunity. Research shows that job openings at small firms jumped 80% in February from the start of last year, compared to 20% for larger companies.

There is now a lot of quality talent on the street. Smaller tech firms are benefitting from this, and many, like Neo, have had more applications and interest from skilled tech workers than ever before.

For the first time in years, startups can compete with the biggest and best firms in the battle for talent. Candidates that would usually have been swayed by the perks of big tech are now rethinking their priorities and realising the opportunities that startups can provide them.

Playing a bigger role and quicker progression due to smaller and flatter hierarchies are a huge draw. As well as this, by joining an early-stage startup employees will often get a generous part of the company which can prove to be lucrative should the firm’s valuation increase.

The added expertise from these highly experienced candidates will help tech startups continue to disrupt legacy processes and big players in the market.

Further down the line when these people are embedded, we could see even more collaboration and partnerships between fintechs and bigger firms as these new senior employees start to tap up contacts in their Rolodex.