Like a runaway train, the wave of tech layoffs shows no signs of slowing down in 2023. Layoffs.fyi found that between January and May of this year more than 200,000 people around the world were at the wrong end of the Pink Slip.
The layoffs from big tech companies are ringing like a gong across the industry. The giants of Silicon Valley shed over 104,000 jobs collectively last year, and those job cuts are far from over. Meta, for example, initiated a round of layoffs Last month The aim is to target up to 6,000 employees as part of the plan to cut a total of 21,000 jobs in what is known as an efficiency year.
In a way, this is to be expected — publicly traded tech giants falter to the beat of the stock market, and it’s been a bear market since January 2022. And it’s not just the giants in the forest that are exposed to this storm. The seedlings also bend.
Startups in Europe together cut Over 40,000 jobs were lost between March 2022 and March 2023. For example, the Netherlands-based company MessageBird laid off 31% of its employees (about 250 employees) in November 2022, while the Spanish company Glovo laid off 250 employees in January this year.
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It’s high time Europeans sounded the alarm – but not in the way you might think.
The European layoff landscape – not quite the apocalypse
First of all, most job cuts are taking place outside of Europe.
According to Atomic State of European technology According to the 2022 report, only 7% of global workforce reductions took place in Europe. Likewise, data from Layoffs.fyi for the last two years shows that only about 12% of all laid-off workers were based in Europe.
Even global tech giants with offices in Europe are laying off fewer employees here than elsewhere — and for two main reasons.
First, there are companies like Amazon and Google find it difficult Thanks to labor protections on the continent, they can copy and paste their mass redundancy tactics in Europe.
For example, there were no job cuts at Google’s stores in France and Germany in 2023, and the company has announced that no layoffs are planned in Romania, Greece and Austria. In the UK, on the other hand, health and safety regulations have not been as strict since Brexit, which is why Google wants to say goodbye to around 500 of its 8,000 employees there.
Secondly, in Europe there is still a very high demand for technical talent such as sales representatives, software engineers and systems analysts. In the fourth quarter of last year, as global layoffs gathered momentum, there were still almost a million tech job vacancies in 11 EU countries analyzed by trade associations CompTIA.
In addition a ALTHOUGH reporting showed that European companies found it difficult to fill these roles. Around 55% of companies that recruited or tried to hire ICT professionals said they found it difficult.
In other words, tech layoffs in the EU are a drop in the bucket compared to the tech skills shortage in the EU expected to achieve 3.9 million people by 2027. This explains why tech companies, big and small, are cautious about downsizing given Europe’s talent shortage. When hiring is already painful, firing is even more painful.
The Global Talent Bazaar: Can Europe Close Its Talent Gap?
American companies are letting people go, while Europe is in dire need of talent. Doesn’t that sound like a perfect match? This is Europe’s chance to attract the talent that American companies hired, trained for tech, and then poached like hot potatoes.
And it’s getting better. Global tech talent is showing interest in joining European companies, either by relocating or working remotely. According to the Landing.jobs report34.1% of respondents named Europe as their preferred work continent, while North America was second at 24.9%.
Europe’s appeal stems from a wealth of factors, from its worker-friendly labor laws to its emphasis on work-life balance. And in these tough economic times, European startups have become attractive to the global talent pool for another reason – greater job security.
For decades, European startups had comparatively limited access to later capital. As American founders developed and adopted the hypergrowth mindset, European companies learned to survive with it prioritizing profit. Compared to their American counterparts, European founders are more cautious. Although this often holds them back, this time it paid off – we see fewer layoffs and employees can therefore be more confident of keeping their jobs.
With global talent with Europe and European companies in mind becomes more and more open It looks like a win-win when it comes to hiring remotely to fill the talent gap. Furthermore, the fact that even large tech companies have been hit by mass layoffs has shattered people’s illusions about “job security” at large tech companies. Ironically, this makes the prospect of joining a smaller startup seem less like a gamble. Therefore, it is the opportunity of a lifetime for young startups to hire talent that they might otherwise not be able to attract.