What do the layoffs at Meta, Twitter and Google mean for aspiring tech entrepreneurs?

Even beyond the recent shitshow at Twitter, do the layoffs at mega tech corporations from Amazon to Alphabet signal that the utopia of a plush tech job might be a thing of the past?

It’s a dream for the ages: You get into a premier engineering college, land a plush job at any of the big four tech companies, save enough money to pursue higher studies, get married and settle in Silicon Valley. You have the luxury of taking weekly excursions to the Bay Area of California, overlooking a smack of blooming jellyfish, enjoying everything from Grand Velas tacos to Almas Beluga Caviar to a portion of black truffle brie. 

Except you didn’t anticipate the COVID-19 pandemic, the horrors it held and the wide-ranging effects it would have on your dreams, even over two years since it first reared its ugly fangs. What are these purported effects? At Meta last month, its CEO Mark Zuckerberg announced layoffs for 11,000 employees, anticipating more in the coming months. Amazon, Alphabet (Google's parent company) and Twitter have all trimmed their workforce. Does this necessarily indicate that the tech bubble has burst? Or is it just a minor, momentary blip in the juggernaut that it had so far proven itself to be?

Misleading expectations?

“I think it is the manifestation of a systemic issue, as hiring trends in tech for a while have defied logic,” Kailash Nath, chief technology officer at Zerodha, a 2010-born, financial services company, tells The Established. “A lot of organisations incorrectly conflated the idea of product and business growth with growth in employee numbers, perhaps fuelled by a funding flurry and a case of FOMO.”

Nath adds that technological innovation and headcount rarely have a linear relationship and that this “funding flurry and overhiring” in the industry set the wrong expectations for many young engineers. “Unprofitable enterprises stretched boundaries of logic in their race to the bottom to “grow” and that is going to leave a lot of people confused,” he says. 

A snowball effect

However, there is also a view that the layoffs at tech companies must not be seen in isolation. As the world is grappling with an economic slowdown and staring at a global recession, many businesses, including tech, are facing the collective brunt. Ashish Chopra, the hiring manager at Google India, echoes a similar sentiment. “Bigger companies, regardless of their domain, by default have a larger pool of employees that will be susceptible to market volatility,” he says. “To me, this is a fallout of economic slowdown and recession in many markets.”

However, Chopra does caution that Google—much like many other large firms—did “hire like crazy” because the company was growing. Now, with the economic slowdown and near-negative market sentiment, there is a hiring freeze with Google restructuring its hiring plans, even cost-cutting. “We were supposed to go for an offsite in Phuket, and that has been cancelled,” he says. “So cost-cutting and better planning is definitely a priority at Google.”

Chopra says that the impact is evident in his hiring targets—from closing around eight vacant positions every quarter to just two. And yet, he harbours the hope of things returning to normalcy once the geopolitical crisis in Ukraine and the unrealistic constraints in China’s aggressive zero-COVID policy that affect overall industrial production and supply chains ease up. 

What lies ahead 

But can up-and-coming students, and younger employees, really afford to adopt a  wait-and-watch approach? Zainab Delawala, a 26-year-old product designer at a popular Mumbai-based ed-tech start-up certainly doesn’t think so.

“At this point, all of us tech professionals should try and have a Plan B, keep our resumes and portfolios updated and have some savings and an emergency fund handy,” she says. “Networking helps a lot, talking to your peers and seniors can also be of aid to reduce anxiety and also keep you visible within the industry.”

Will this spate of layoffs jolt students from pursuing their tech dreams? For many, who couldn’t imagine a life without it, it has certainly led to a reconsideration of sorts, with a reigning question—is pursuing a full-time career really worth all the anxiety and unpredictability? Delawala, for her part, believes that ambition cannot be blunted by these short-term bumps.

“People do what they have to do and the highly ambitious ones will anyway pursue it,” she shares. “This is not the first time that such a situation has arisen; this happened during the recession in 2008, too. After all, there are multiple factors to layoffs—timing, redundancy of roles in the company, market conditions and cost-cutting policies, to name a few.”

Siddharth Elango, who worked as a product manager, also opines that it would be amiss to believe that the impact is going too deep. The future, he says, will be tech-based and tech-driven. “There is too much potential in tech to be irreversibly affected by the economics of hiring and firing. I’d even go so far as to say that there will be another wave of hiring and extravagant paychecks in tech, even as early as 2024.”

Can companies necessarily prevent this from happening again; perhaps be more mindful of the way they hire people, structure their annual plans and not take impulsive decisions? Chopra from Google believes that the forecasting department of his company or any other company does their best with the available variables, as no one could have predicted a once-in-a-century pandemic and a potential third world war. Nath from Zerodha, however, is more circumspect with his two cents: “Common sense and first principles help resist FOMO, delusions and economic shocks and surprises.”

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