Opinion: European startups should welcome global tech layoffs with open arms

Like a runaway train, the tech industry’s layoff spree shows no sign of stopping in 2023. Layoffs.fyi found Between January and May of this year, more than 200,000 people around the world found themselves on the wrong end of their dismissal notice.

Layoffs at big tech companies echoed like gongs across the industry. In total, Silicon Valley giants cut more than 104,000 jobs last year, and those layoffs are far from over. For example, Meta last month began a round of layoffs of up to 6,000 jobs as part of a company-wide plan to cut 21,000 jobs . The so-called efficiency years.

To some extent, this is to be expected – publicly traded tech giants will sway to the rhythm of the stock market, This is a bear market from January 2022 onwards. It’s not just the giants of the forest who face this storm. The saplings are also bent.

European Startup Collective cuts A total of 40,000 jobs will be cut between March 2022 and March 2023. For example, MessageBird in the Netherlands will lay off 31% (about 250 people) in November 2022, and Glovo in Spain will lay off 250 people in January this year.

It’s time for Europeans to sound the alarm – just not in the way you might think.

European layoff situation – not exactly doomsday

first , most of the layoffs occurred outside Europe.

according to Atomico’s European technical status According to the 2022 report, only 7% of the global workforce retrenchment occurred in Europe. Likewise, data from Layoffs.fyi over the past two years shows that only about 12% of laid-off workers came from Europe.

Even the global tech giants with offices in Europe are laying off fewer workers here than anywhere else – this is There are two main reasons.

First, companies like Amazon and Google find it hard copy and paste their mass layoff strategy in Europe thanks to labor protections on the continent.

For example, Google’s French and German branches will not have any layoffs in 2023, and the company has announced that no layoffs are planned in Romania, Greece or Austria. In the UK, on ​​the other hand, labor protection regulations have been less stringent since Brexit, so Google plans to say goodbye to about 500 of its 8,000 employees.

Secondly, in Europe, technical talents such as sales representatives, software engineers and system analysts are still in high demand. When mass layoffs accelerated around the world in the fourth quarter of last year, trade association CompTIA analyzed that there were still almost 1 million vacancies in tech across 11 EU countries).

Additionally, a DESI report Indicating that European companies are having a hard time filling these roles. Some 55% of businesses that recruited or attempted to recruit ICT specialists said they found it difficult.

In other words, EU tech layoffs are just a drop in the ocean compared to EU tech talent shortage, ie is projected to reach 3.9 million people by 2027. This explains why tech companies large and small are cautious when it comes to laying off staff amid Europe’s talent crunch. If hiring is already painful, firing is even more so.

Global talent market: Can Europe fill the talent gap?

US companies are laying off workers while Europe is desperately short of talent. Doesn’t that sound like the perfect match? This is Europe’s chance to attract talent that American companies hire, train for the tech industry, and then drop like a hot potato.

And it just got better. Global tech talent is showing interest in joining European companies through transfers or working remotely. According to the Landing.jobs report , 34.1% of respondents listed Europe as their preferred continent for work, while North America was second at 24.9 % %.

Europe’s allure lies in its abundance of factors, from employee-friendly labor laws to an emphasis on work-life balance. Another reason European start-ups are attractive to the global talent pool in tough economic times is higher job security.

For decades, European start-ups had relatively limited access to late-stage capital. While American founders developed and adopted a hypergrowth mindset, European companies learned to survive by prioritizing profits . European founders are more cautious than their American counterparts. While this often held them back, this time it paid off – we saw fewer layoffs, and employees felt more confident about keeping their jobs as a result.

European companies are becoming more open as global talent looks to Europe

Remote hiring to fill talent gaps looks like a win-win. Moreover, the fact that mass layoffs have even affected Big Tech shatters the illusion of “job security” at Big Tech. Ironically, this makes the prospect of joining a smaller startup seem like a gamble. So, it’s a golden opportunity for early-stage startups to hire talent they might not otherwise be able to attract.