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Startups are increasingly recruiting freelance software developers, data scientists and engineers, with big employers and big paychecks — creating an opportunity to build software capabilities from the ground up, tech recruiters and investors say.
Startups are increasingly recruiting freelance software developers, data scientists and engineers, with big employers and big paychecks — creating an opportunity to build software capabilities from the ground up, tech recruiters and investors say.
Other startup benefits include permanent remote or hybrid work models and equity stakes with more upside potential than stock options offered by mature companies.
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Other startup benefits include permanent remote or hybrid work models and equity stakes with more upside potential than stock options offered by mature companies.
Scott Ruffin, co-founder and CEO of Pandion, a three-year-old e-commerce startup, has hired three employees who were laid off by Facebook parent Meta Platform in recent weeks.
Of the 65 new hires last year, roughly 15% were laid off workers from Meta, Tesla, Amazon.com and Google, among other large tech employers, Mr. Ruffin said. The Seattle-based company currently has more than 85 full-time employees following its initial hiring spree last year. Last summer, Pandion raised $40 million in a Series A funding round.
According to Mr. Ruffin, like many other startup employers, the pay scale for most of the tech workers Pandion has interviewed over the past few months has been low. On salary negotiations, he said, “You hit a certain number and there’s always someone bigger with deeper pockets who will offer more.”
Instead, Mr. Ruffin said, “We’ve been able to attract some pretty high-quality talent because what we do is different.”
By one count, large tech companies laid off an estimated 165,000 workers last year and an additional 191,000 this year, according to Layoffs.fyi.
U.S. employers added a total of 253,000 jobs in April, the largest increase since January, and the unemployment rate fell to a decade-low of 3.4 percent, the Labor Department said Friday.
While technology sector employers overall, including startups, added more than 18,000 new workers in April, the number of technology-related jobs at U.S. companies across all industries fell by 99,000, an analysis of federal jobs data reported Friday. – Technology trade group CompTIA. Amid layoffs by the technology sector’s biggest employers, startups accounted for the largest share of employment last month, analysts said.
According to Ruth Ebeling, managing director and partner at management consulting firm Boston Consulting Group, at least 40% of tech workers who found new jobs after being laid off in the past nine months are now working at startups or other small tech employers.
“While some have gone back to big tech, for others the industry has lost its charm,” Ms. Ebeling said.
According to Victoria Sun, principal of venture investment firm Playground Global, many tech workers feel “locked in” by generous compensation packages at big tech companies, even though the work itself is boring, “in some ways it’s close to layoffs.” Freedom from their golden clutches,” said Mrs. Sun.
Tech workers often see startups as a way to develop their skills and advance their careers—especially at startups—because they tend to take on more responsibilities than they can, play a bigger role in decision-making, and get closer. for products and customers than you would at a large tech company.
“The best talent is always looking for where they can make the most impact and how they can accelerate their careers,” says Alex Kayal of Lightspeed Venture Partners. Some tech workers started their careers at tech giants, he said. When they joined, they weren’t much more than startups. In some ways, they’re now looking to get back to those roots and join a ground-floor company, he said.
Ayal Yogev, founder and CEO of cybersecurity startup Anjuna Security, said the ongoing strike at the tech giant’s market leaders has many workers reevaluating the idea that large, established employers offer better job security than startups on shoestring budgets.
“If Google is going to lay people off, it’s going to make more people comfortable with the idea of working at a startup,” Mr. Yogev said.
Marginalized tech workers are also being drawn into non-technical positions at startups, Mr. Yogev said. Anjuna, which launched in 2018, recently filled two open sales positions at a large tech company with laid-off applicants, he said. The Palo Alto, California-based company currently has about 55 employees, he said.
“Hiring is very easy these days,” says Mr. Yogev. Of his layoffs, he said, “There are a lot of amazingly talented people out there these days.
Write to Angus Loten at Angus.Loten@wsj.com
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