The recent string of mass layoffs in the technology sector, which included the dismissal of tens of thousands of workers by Amazon and Meta, has created an incredible opportunity for businesses that had previously aspired to grow their ranks but were unable to do so because of a talent shortage. Traditional businesses that were unable to successfully modernise their business processes in the past now have access to some of the most talented people in the world. These same conventional businesses, which could never have afforded to compete with recruiters from hip Silicon Valley companies, are now able to swoop in and offer career salvation to laid-off technology workers.
The recent round of layoffs, in our opinion, has presented conventional businesses with an excellent business opportunity. They are able to gain access to new talent in a market that is less competitive if they recruit and hire from the ranks of the world's leading digital companies, which have since left those ranks. This talent can assist them in transforming their stale business models into models that are digitally agile, which will better prepare them for the increasingly volatile business environments. In this article, we will discuss the factors that led to these terminations of employment. After that, we discuss the strategies that businesses that are not involved in the technology industry can implement in order to reap the benefits of the sudden influx of talent.
A Turnaround in the Practice of Overhiring
During the time of the pandemic, an excessive number of people were hired, but now we are seeing that trend reversed on a large scale. In a message to employees regarding recent layoffs, Meta CEO Mark Zuckerberg wrote, "At the start of Covid, the world rapidly moved online, and the surge of e-commerce led to outsized revenue growth." A good number of people hypothesised that this would be a persistent quickening that would persist even after the pandemic... I was hoping for a certain outcome, but it did not turn out the way I anticipated.
Patrick Collison, the CEO of Stripe, wrote a similar statement to explain the company's decision to reduce staff by 14%: "At the outset of the pandemic in 2020, the world rotated overnight toward e-commerce. When compared to what we had seen in the past, the growth rates we saw in 2020 and 2021 were significantly higher than those we had seen in the past... The world is undergoing another major shift right now.
The information technology industry was unprepared for such a sudden increase in interest rates, which resulted in a significant decrease in the valuations of companies whose profits would arrive in the far future. This is due to the fact that the discount rates that are used in valuations continue to rise along with the interest rates. The technology-heavy NASDAQ has experienced a decline of approximately 30% over the course of the past year. More risky funds that were heavily invested in technology, such as Cathie Wood's Ark Innovation fund, have seen losses of 65%. A significant number of crypto funds and other types of fintech funds have failed. Both the activity surrounding new businesses and their initial public offerings have come to a complete halt. This has an impact on the expansion strategies of capital-hungry technology companies, which are currently winding down their hiring in preparation for expansion strategies.
But traditional businesses that have strong foundations shouldn't be negatively affected by these challenges, at least not to the same extent that new technology businesses that are just starting out are. In contrast to previous economic downturns, in which employers eliminated positions that were no longer essential to the running of the business, the recently laid-off workers possess a wide variety of skills that are in high demand. Amazon has laid off employees from its Alexa division, which is responsible for a variety of technologies including voice technology, artificial intelligence, and automation. Twitter eliminated positions within its engineering, data science, ethical AI, and machine learning teams.
An Opening for Traditional Businesses to Embrace Modernization
In addition, the pandemic ushered in a new era for the way in which businesses operate. Many companies have come to the conclusion that their business procedures need to be redesigned in order to become more adaptable. For example, conducting Zoom conferences from the comfort of one's own home is not sufficient for remote work. Managers can now manage an entire bank's currency trading platform from their homes just as effectively as they can do so from an office in the bank's corporate headquarters.
This long-term and significant move toward hybrid work necessitates the development of new systems for human resources, a reorganisation of workflows, new and updated e-commerce platforms, advancements in engineering, and improvements in cyber security, amongst other things. Companies that were unable to build these systems in time to combat the pandemic can now benefit from an influx of skilled workers who can demonstrate to them how to get the job done.
A year ago, a young, aspiring software engineer would probably have been more motivated to join a cryptocurrency exchange as opposed to the e-commerce branch of a brick-and-mortar company. This is because of the nature of the cryptocurrency market. Brick-and-mortar retailers, or any firm with solid fundamentals that has not yet entirely modernised, may now outcompete technology companies when it comes to acquiring the expertise they require because technology companies are now decreasing their employees.
Who Should Your Company Look to Hire Next?
Traditional businesses need to prioritise the hiring of workers who can assist them in achieving the following goals: the transition to a remote workforce; the analysis and optimization of the customer journey; automated customer service; the collection and utilisation of AI-driven insights to improve sales efficiency; the automating of employee performance management; the improvement of supply chain management and the optimization of human resource planning.
Examples of companies that have successfully undergone digital transformation include Target, Nike, Home Depot, Hasbro, and Best Buy. Conversely, General Electric, Ford, and Procter & Gamble are examples of companies that have not been successful. In every instance, the workers were the critical component in determining whether or not the transformation initiatives were successful.
If you work at a traditional company, you should take advantage of the recent layoffs to look for potential employees who have the following skills:
Businesses will almost always face difficulties as a result of economic volatility, but the majority of those difficulties can be alleviated through digital transformation. Customers will be compelled to adjust their discretionary spending patterns if, for example, we do enter a recession and the current inflationary environment persists. Retailers are able to develop and use technologies, such as machine learning and agile systems, to identify shopping patterns, understand purchasing behaviors, adjust promotions and special offers, personalise product recommendations, tweak pricing on the fly, and strike a balance between supply and rapidly changing demand as well as customer preferences.
In some shape or form, this opportunity can be found in each and every sector of the economy. However, you won't be able to reap the benefits of it unless you have employees who are capable of putting these technologies into practice. To our good fortune, tens of thousands of these workers have just recently entered the market.
Steal employees from competing technology companies.
Former workers who have recently been let go are not the only source of talent. Companies should also be on the lookout for employees who still have jobs but are willing to leave precarious positions at tech companies and try to recruit them away. As a result of technological companies cutting back on research and development as well as new projects, reducing head counts, cutting employee salaries and bonuses, and stock options becoming worthless due to falling stock prices, employees are looking for more stable employment opportunities.
Workers in the technology sector in the United States who hail from countries such as China and India can only remain in the country if they have an H-1B visa. If they are terminated from their position, they have sixty days to find new work or they will be required to give up their visa and leave the country. It's likely that a good number of these workers, who have not yet been laid off, are anxious about the possibility of losing their jobs.
Acquire Technological Businesses That Are Struggling
Traditional organisations are in a position to take advantage of the current market environment by acquiring tech companies and purchasing assets at fire-sale prices. This is especially true for businesses that are having trouble raising capital to continue daily operations. Acquihires are a type of acquisition in which a company acquires another one for the purpose of filling open positions with new employees. Patents can be extremely valuable resources for an acquirer, and some start-up businesses already have patents in place. There are some start-up companies that have developed new business ideas or even created an emerging brand, but they do not have the financial or marketing muscle to launch them on a large scale. It is now possible for businesses to acquire those valuable assets at prices that reflect a discount, which will allow them to unlock their value.
The lessons that history has taught us over and over again are that those who are able to capitalise on the opportunities and acquire the appropriate assets, customers, talent, and competencies at the appropriate prices emerge victorious from economic downturns and difficult times. This moment in time is represented by the recent wave of layoffs.
Your email address will not be published. Required fields are marked *
Human Resource Management
1
