In tech, hiring freezes, layoffs, and general stagnation seems to be at the top of everyone’s mind lately.
Nearly every day there’s a new FAANG company or startup announcing hiring freezes or a new round of layoffs. Uber and Meta have both announced hiring freezes to prepare for a potential recession. And companies like Netflix and Bolt have unfortunately already begun layoffs.
For veteran tech workers and newcomers alike, this can feel overwhelming and scary as no one knows what comes next.
Up until now, hiring has been competitive.
Top companies were increasing bonuses and salary packages to attract top talent even just a few weeks ago. However, demand for those same positions has slowed.
Hiring freezes are primarily a worry for job seekers, but they can also cause current employees to be anxious about their job security.
Below, we’ll outline what to do and expect if your company announces a hiring freeze.
Hiring Freezes and Layoffs Aren’t the Same Thing
Hiring freezes aren't just a euphemism that layoffs are imminent at the company you’re working for. You probably won't walk in tomorrow to find out all the software engineers have been laid off, for instance.
When the economy slows down, a hiring freeze doesn’t always mean something bad.
It’s very likely that your company is just being cautious.
For small companies, a hiring freeze may be an important step to ensure there’s enough money in the bank, or runway, to keep the company healthy long term.
For the last few years, tech companies have been investing and developing their businesses like crazy.
Now, they have to be more cautious with how they invest their money.
The economy has flourished over the last year or two, specifically.
However, now that that the market is trending towards a recession, that puts excess pressure on those same companies.
They both have to adapt their current business plans as well as revise their plans for growth.
A hiring freeze is an easy way to put a pause on one aspect of their business while they assess needs in other places.
A hiring freeze doesn’t mean layoffs.
Just because a company says they’re slowing down hiring doesn’t mean they’re not going to downsize their workforce as well.
Is Your Company Healthy?
One good way to understand if your company is recession-proof is to look at its historical growth.
Was your company growing before the pandemic hit? What kind of software engineers, product managers, and marketing roles was your company hiring for in the past.
Is the company’s success largely in part because of the pandemic or were there strong signs of growth before COVID?
If your company has held strong over the last three to five years, it’s probably a good sign that the business will weather this storm as well. Especially in tech.
Certain businesses are more impacted than others by recessions.
A big question you should ask yourself is whether or not the products that your company sells are needs or wants.
If you sell luxury goods, a recession is a hard time to stay in business.
Does your company sell things that people only buy because they have extra money to spend or is your product an integral part of daily life?
Similarly, your company is also looking at which roles are more secure than others. Software engineers and product teams are likely safe as companies still depend on them to maintain current business operations.
However, new product development or R&D teams may be dialed back as businesses focus on their core competencies more than growing into new spaces.
What is Your Company Prioritizing?
Companies eyeing employment freezes are looking at their bottom line and the cost of payroll.
If you believe your organization is about to go through a round of layoffs, make yourself visible!
When companies start talking about layoffs, they’re looking at parts of their business that aren’t immediately important. However, that doesn’t mean entire departments will get cut.
Instead, companies look for top performers to move to other key business areas.
When looking at which employees to retain and which ones to let go, managers are looking at an employee’s adaptability and likability within the team.
Even if your current role gets eliminated, you can make a strong case for how your skills integrate with other departments.
Have a candid conversation with your manager about what metrics you can achieve to stay valuable to the company.
How are the things you’re working on impacting the bottom line at a business that’s struggling in a recession?
Above all else, remember that recessions aren’t forever. Companies weather storms like these every few years and this type of contraction likely won’t impact your career long-term.
Focus on improving your current job and interview skills, and even how to negotiate a severance package so that you’ll be ready to hunker down and adapt if your company makes changes to hiring.