Big Tech Hiring Freeze Could Present Opportunities for SaaS Startups

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The trend of big tech hiring freeze and layoffs is sweeping the industry. For the past two weeks, companies such as Meta, Robinhood, Twitter, and Uber announced hiring freezes and layoffs. Salesforce and Netflix are the newest to join the list this week—the former will slow hiring and cut back on expenses while the latter will lay off 150 employees and dozens of contractors. Based on the numbers being tracked by layoff tracker Layoffs.fyi, there have been at least 66 tech companies that have had layoffs in 2022.

Meanwhile, other signs of contraction can be seen in weaker Q1 earnings reports from Google, Apple, and Amazon. The tech sector boomed during strict lockdowns and remote work conditions at the start of COVID-19. Now, it seems like the giant wave these companies have been riding has passed and they can’t maintain the same success they experienced two years ago.

Certainly, there are other factors affecting the slowdown aside from the easing of pandemic restrictions. Inflation and macroeconomics play their roles. Overhiring during the pandemic when demand was high could also be a reason why big tech is now letting go of workers to get better control of their destiny.

Opportunities in Times of Crises

But it’s not all bad, particularly for mid-size and startup SaaS companies that can capitalize on this big tech slowdown. Hiring freezes and layoffs taking place in these tech giants may be more specific to their business situations and don’t represent the broader picture of hiring in the tech industry.

For example, we reported on Netflix password sharing issues and how those resulted in their 200,000 subscriber loss in the first quarter. On the other hand, Meta has acknowledged that Apple’s iPhone privacy features have impacted its ability to make money on ads, which could have influenced Facebook’s parent company to decide on layoffs and hiring freezes. As for Robinhood, it’s said that it will be cutting 9% of its full-time employees after it saw overlapping job functions brought about by a hiring spree in 2021.

Looking at the state of hiring in the SaaS market, 64% of businesses in New York’s strong startup ecosystem plan on hiring even more people in 2022 than they did in 2021. Moreover, roles in specializations like cybersecurity, software engineering, and artificial intelligence continue to be in high demand and are hard to fill. In fact, cybersecurity just reached a 0% unemployment rate, making it even harder for hiring managers to find the right talent for open positions. With the tight market for talent still persisting in the broader job market, and big tech employers letting go of their tech professionals, mid-size SaaS companies and startups might just get new opportunities to attract qualified and experienced talent.

Of course, this doesn’t mean that positions will now be easy to fill. It’s an employee’s market, after all, so SaaS companies that wish to hire the best talents should also be ready to have some great offers. And we’re not just talking about compensation here. Candidate experience, for instance, has become a key recruitment factor as well as the option for remote work or hybrid work setup for employees. As we all learned from the recent resignation of Apple’s high-profile AI director over the company’s return-to-office policy, tech companies must now be able to meet employee expectations for remote work to attract and keep top talent.