Startups Cautious on Hiring Big Tech Workers Despite Layoffs Influx

  • Tech companies have experienced historic layoffs this winter.
  • Startups are having unprecedented success recruiting top tech talent, overturning decades of power imbalances.
  • But founders are cautious about Big Tech employees and whether they have the skills to succeed in the startup environment.

Ahmed Reza listened late last year when he heard about layoffs and hiring freezes at Facebook, Amazon and Twitter.

“I shouldn’t have been blinded, but I was,” he said.

For Reza, CEO of a tiny artificial intelligence-powered communications app called Yobi, the layoffs and hiring freezes were an opportunity. Suddenly, thousands of high-quality tech workers were looking for jobs, and it seemed unlikely that Big Tech would rehire them any time soon.

Since then, job cuts at big tech companies show no sign of stopping. Earlier this year, Salesforce announced it would lay off 8% of its employees. Amazon has announced it will lay off 18,000 employees.

But as big tech companies let go of record numbers of employees, startup founders are beginning to find their inboxes flooded with resumes. This reverses decades of power imbalance when it comes to hiring talent between the two types of tech companies.

Big tech companies have traditionally had a free hand when it comes to tech candidates, largely because of their superior compensation packages, benefits, and name recognition. Recruiters and startup founders told Insider they’re persuading more employees to join their startups. employee.

According to Andre Bliznyuk, General Partner of Runa Capital, the gamble of working for a startup has become more attractive to tech workers as the tech industry is having a harsh winter.

“A lot of early-stage startups would say, ‘You have a lot to lose. See the good side.”

Startup Job Opportunities Are Increasingly Competitive

Insider spoke with nine startups and five venture capitalists, who said their startups were successfully recruiting from the candidate pool of big tech employees looking for jobs.

Finding a US developer was initially very difficult for Yobi. In fact, recruiting in countries where big tech companies have offices has made it harder to hire top talent, Reza told Insider. But recently, things have changed and his startup is becoming more attractive to former Big Tech employees, he said.

Mountain View, Calif.-based software company Lacework has had similar success hiring Big Tech employees, says Elise, a former Facebook recruiter and senior director of recruiting at Lacework. Carstensen told Insider. But Carstensen, she emphasized, sees candidates on the basis of their technical acumen, not the size of their previous employers.

Economic headwinds are forcing startups to be more selective about who they hire

As economic headwinds continue to mount, startups are becoming more cautious about hiring talent, several venture capitalists and startup founders told Insider.

Greg Adkin, managing director of investment firm Dell Technologies Capital, told an insider, “The feedback I gave early-stage companies is to hire carefully and not over-hire before revenue increases. It is to make

Startups are raising less money and are under pressure to cut costs. With so little venture capital on hand, we can’t absorb all the talent that big tech companies let go of.

Recent layoffs have created a larger talent pool, but some startup founders say they are wary of hiring people deemed underperforming.

“Many layoffs target the lower end of the performance spectrum, but not always. Sometimes entire business units aren’t a good fit,” says Joe Duffy, CEO and co-founder of cloud startup Pulumi. says Mr. “As a startup, you’re small. You can’t afford to take risks.”

There is a big cultural difference between working at a big tech company and working at a startup

Startup founders also cite differences in workplace culture as a hurdle to hiring ex-Big Tech employees.

“Frankly, a lot of them aren’t exactly what I’m looking for,” said Girish Bhat, senior vice president of marketing at data cloud startup Acceldata.

He added that exposure to startup experience is limited.

“They will need six months of training,” he said. “Just because it’s from a big tech company doesn’t mean it’s exactly what I need.”

Other startup founders agree.

MinIO CEO and co-founder AB Periasamy said:

Startups tend to offer modest compensation packages compared to big tech companies that offer laundry services, gyms and elaborate meal plans, he added.

Some founders say that in a niche industry like cybersecurity, hiring employees from other startups is more advantageous because they know how the business model works.

Engineers at large tech companies may be siled into one project, but engineers at startups will juggle many projects, says founder and managing partner of cybersecurity recruitment firm Pinpoint Search Group. One Mark Sasson said:

Startups are looking for “Swiss army knife type people,” Lalitha Rajagopalan, co-founder and head of strategy at procurement startup Oro, told Insider.

“We would be better off hiring someone who has not experienced the luxuries of a company like Meta,” she said. “They are an army of people doing very narrow things.”

To determine if a candidate would be a good fit for a startup, Elias Terman, chief marketing officer at Uptycs, asked whether he had worked on a high-growth product in-house that had grown like a startup. Please, I asked the Big Tech candidates.

“If they’re new to the environment because they only have experience in large companies and have no entrepreneurial experience, they can be challenged in the startup environment,” Turman said. It might be a little yellow flag.”

The tech industry labor market is experiencing a market correction

For many, the recent reduction in technology is a long-awaited market adjustment. As tech stocks continue to crash and recession woes widen into the new year, big tech has entered a period of austerity unlike previous recessions.

Job seekers in the tech industry are starting to notice that the weather is cooling and influence is moving away from it. NEA partner Melissa Taunton told Insider that founders know they don’t have to break the bank to bring in tech talent, and more are entering the market. Told.

Still, a recruiter told Insider. Startups rarely judge a tech worker just by whether he worked for a tech company or a startup. Ultimately, it’s more effective to focus on individual candidates, says Racework’s Carstensen.

“I don’t want to make decisions based on where I went to college or where I worked,” says Carstensen. “We want to make it clear that their skills and expertise come first.”

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