Tech Layoffs Should Make Tech Recruiting Easier. So Why Isn’t It?

It may feel like the current rash of tech layoffs started with Twitter, but they did not. Twitter was just loud about it.

Challenger, Gray & Christmas, an outplacement firm, track terminations, and in 2022 tech led the way, with 97,171 job cuts, up 649% from 2021. So Twitter’s 3,000 to 4,000 employees and 4,000 to 5,000 contractors who were laid off are significant, but certainly not the biggest group of layoffs.

TechCrunch has a searchable database of layoffs in tech companies, and although many organizations’ totals are listed as “unclear,” it shows how many tech companies have laid off people in 2022. (For inexplicable reasons, if you sort by number of terminations, it sorts numbers as if they were letters. So 1, 100, and 10,000 all come before 2.)

In other words, many people who used to work in tech are now (presumably) on the job market. How does that affect recruiting? Is there a smorgasbord of new talent that employers can snap up quickly, or is finding the right candidates still as hard as ever?

Not Every Laid-Off Tech Worker Is Instantly Available

It makes sense that if one’s job ended yesterday, that person is available for work at a new company today, but that’s not always the case.

If employees receive severance, which many in the tech sector did, they may not be able to work right away. They may still have noncompete or non-disclosure agreements that prevent them from doing the job you want them to do.

Usually, to receive severance payments, a laid-off employee has to sign a “general release” that says in exchange for money, the ex-employee agrees not to do X, Y, and Z. Mostly, that revolves around waiving rights to sue (where applicable; not all rights are able to be waived), but they can also contain non-competes.

While California, where many layoffs occurred, generally has no patience for noncompetes, only some states are so worker-friendly. (The FTC is floating , but that doesn’t affect employers right now.)

Twitter workers, many of whom I represent, were FINALLY given their "severance agreements" on Saturday.

They are really settlement agreements which SILENCE WORKERS FOR LIFE and and require them to give up important legal rights.

Let's discuss. 1/

— Lisa Bloom (@LisaBloom) January 9, 2023

Recruiters dealing with candidates who have received a severance package must therefore ask early and upfront if they have any clauses that would prevent them from taking the job. Job seekers may not actually know, as many people sign general releases without either reading them or consulting an employment attorney, so ask them to double-check.

Meanwhile, recruiters tempted to ask candidates to provide a copy of their general release should proceed with caution. Many such agreements prohibit former employees from sharing that information freely.

Tech Workers Aren’t Desperate and Willing to Take Less Money

The general wisdom is that as people get laid off, they are eager to work for less to get back into the workforce. While that is often logical and reasonable, many employers aren’t seeing people willing to make sacrifices yet.

There are still many tech jobs available. For instance, a quick search for “full stack developers” on Indeed returns over 15,000 open positions, with 12,000 having estimated salaries in the six-figure range. For software engineers, there are 136,000 jobs listed, with 106,000 of those at salaries above $95,000.

The takeaway is that there have been roughly 97,000 people in tech who have lost their jobs, but recruiters are still seeking far more people than that. (Of course, not all of these are tech people, nor are tech jobs only available in the tech sector.)

The other takeaway? Bargain hunting is not a strategy that is likely to pay off for employers. Candidates still want good salaries and perks, like working from home. And they hate onerous job application processes. As developer Greg Bulmash points out, tech recruiters “could use fewer job websites that make you spend 10 to 20 minutes filling out fields in a web app that reads your resume or LinkedIn.”

One group of laid off workers might be desperate, however: People on H1B visas. Tech workers make up a large percentage of these individuals, and they have 60 days to find a new job after their last day as an employee. (That distinction is vital because a last day worked may not be a last day as an employee.)

If you have recently been laid off and hold an H1B visa, we would love to chat with you @donotpay.

25% of our team are not US citizens and we can move quickly.

We have never laid off anyone in our 7 year company history and don’t plan on it

— Joshua Browder (@jbrowder1) November 22, 2022

Recruiters Layoffs

One area in tech that has been hit harder than others is recruiting. The Wall Street Journal reports that while other areas within tech companies saw cuts of 10% to 12%, companies slashed tech recruiter jobs by 50%. While this is terrible news for the recruiters themselves, it also means that there are fewer qualified recruiters currently actively recruiting.

Of course, when companies are downsizing, they don’t need to recruit as many people, but when they do need to recruit, having talented, knowledgeable, and experienced people onboard is a boon.

Recruiting in different industries comes with various challenges. A tech recruiter may not be best suited to jump into a blue-collar recruiting company and vice versa, which gives current tech recruiters an advantage in a labor market that is still quite tight.

But it’s worth watching: Just like in 2021, when companies couldn’t hire recruiters fast enough, there will likely see an uptick in recruiter jobs as these layoffs settle.

Ultimately, finding the right person for the job still requires that the company knows which skills it needs and is willing to pay the price for it. People who have just experienced job loss may be more cautious about joining an unstable company. Packages may have to reflect that fear.

Simply out: A Recruiter’s job is still hard, even with 97,000 new tech workers on the market.