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Technology Startups Are Laying People Off. How Can Your Company Benefit From The Purging Of Talent?

June 2022

There’s an old saying that goes, “When it rains, it pours.” For a tech company, this saying feels like a reality. With so many companies competing for talent, tech companies often have to lay off people in order to have enough money to keep their business running smoothly. But what does this mean for their competitors? How can your company benefit from the purging of talent?

Layoffs Are a Reality of the Tech Economy.

As the tech economy slows, startups are laying off employees in droves. This is a sign of both the downturn of the economy and an end to the tech boom.

In a more serious tone: layoffs are part of your company’s business plan. They should not be treated as optional or avoidable; rather you should expect them to happen and plan for them accordingly.

What Happens to Employees When They Are Laid Off?

When an employee is laid off from a company, it’s not just the employee that is affected. Family members and friends may also be impacted. Friendships are strained and family relationships are strained, as well; you don’t want to be the one who is still working while everyone else in your life has been laid off.

But what happens when you lose your job? How do you cope with being laid off? You might feel shocked or angry, or even sad. You might feel confused about what happened and why it happened to you. And if it’s temporary (which most layoffs appear to be), then there will always be that uncertainty in the back of your mind: Will I get another job? Where will I find another job? Is this going to affect my career trajectory negatively? What happens next?

These questions can cause stress on their own—but when combined with other factors like paying bills or supporting a family financially, these questions become even more stressful for those who have lost their jobs recently because of companies cutting costs due to poor performance or cash flow problems.

Why You Should Move Fast and Hire Talent from Recently Laid-Off Companies.

Although it’s a tough time for companies and employees, there are some positive benefits for you.

  • Talent is abundant, and the market is no longer an employer’s market. Historically, companies were in control of finding talent, but now that power has shifted to employees. There are many talented people looking for jobs right now—and they know it! This means that you can hire talented people at a lower cost than before.
  • Talent is more likely to be motivated since they are looking for work. The motivation factor plays into your favor during this period of unemployment because these workers tend to be interested in new opportunities and ready to jump on board with a new company if yours has something exciting going on or if it offers better career development than what they had previously been working at.
  • Less likely burned out by current situation (typically).

The Economic Downturn May Pave the Way for Opportunities in a Diverse Labor Pool.

The downturn has created a more diverse labor pool. Recruiters and hiring managers have learned that they need to go beyond the usual suspects when searching for talent. They’re looking at people who have been laid off, re-entering the workforce after taking time off or going back to school, and even those with no experience but an eagerness to learn. This is especially true in technology startups where candidates are often considered based on their potential rather than past performance.

The downturn has also made it easier for companies to hire from outside their immediate area—which means you may find yourself competing against local companies who are willing to pay more but don’t necessarily offer better benefits or opportunities for growth than your company does. The key here is opportunity cost: If a candidate accepts another employer’s offer of employment at $4 per hour less than yours, then you have lost out on four hours’ worth of productivity each day until he or she gets trained up enough that they’re worth paying regular wages again (assuming there’s no shortage of qualified workers).

We live in a new world, where layoffs are common and talent is abundant, and it’s no longer an employer’s market.

The internet has made it easier to find talent, and this means that employers have to work harder than ever before.

First of all, there’s the simple fact that more people are looking for jobs than ever before. The Bureau of Labor Statistics estimates that there were 6 million job openings in the United States in 2017—that’s about 3% higher than in 2016. And there are even more people looking for jobs outside of traditional employment channels: freelancers make up about a third (32%) of US workers according to Pew Research Center research.

This means two things for employers: 1) More competition for talent; and 2) A more informed search process where employees have access to information about their potential employer through Google searches or social media accounts before they ever apply.


Shifts in the tech industry are happening fast, and you can’t afford to wait for the next wave. If anything, your tech company should be ahead of it. The economic downturn has created new opportunities for businesses to thrive—and hiring from recently laid-off companies is a great way to start. If you have any questions, feel free to contact us at Reversed Out Creative.

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At Reversed Out Creative, we understand the challenges and opportunities presented by AI disruption. Our team of experts specializes in web design, SEO, graphic design, and digital marketing services. Reach out to us through our contact form to learn more about navigating the evolving job market and embracing the potential of AI. Together, let’s shape a future that combines human ingenuity with the power of AI.

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