Amid ongoing tech layoffs, employment bright spots appear at recently funded startups

THE start of 2024 saw layoffs continue to roil the tech sector, but recruitment experts report some bright spots of hiring emerging in the local startup ecosystem.

Singapore’s employment statistics for 2023 showed retrenchments more than doubling their 2022 level to hit 14,320.

E-commerce major Lazada axed at least 100 jobs in January, including layers of leadership roles, and most recently, property portal PropertyGuru said on Tuesday (Feb 27) that it would cut 79 jobs and shut unprofitable units.

For much of the startup ecosystem, hiring has hit a pause across all levels.

Akshay Mendon, client director at recruitment consultancy EMA Partners, said: “Unless it is a required replacement, companies are looking to cut costs.”

Still, while employment prospects look gloomy, recruitment experts see some bright spots appearing, noticeably around startups which have just snagged funding.

Yeo Puay Lim, managing director of recruitment platform Glints, said: “We did some work quite recently for a Thai travel and hospitality startup that recently received funding, and was therefore under pressure to scale up and expand quickly across the region.”

Hiring now will be more intentional and unlike 2021, when companies were on a mission to grab as much talent as they could, said Elena Chow, the founder of employment consultancy ConnectOne.

Those who are ready to hire are companies that have already done what they needed to do last year, be it cost-cutting, letting go of staff, or bridge rounds, she said.

Fintech is one sector that has undergone a restructuring and is now gearing up for growth, according to EMA’s Mendon. But he reckons the rebound in hiring for the sector is likely to take some six to eight months.

In places that are hiring, he noted a skew towards customer-facing roles including sales and business development.

A report by Glints and Monk’s Hill Ventures showed that nearly half of startups (49 per cent) were filling key roles in business expansion and revenue generation.

These companies are doubling up and making sure they have very strong people who can contribute to their profitability, he said.

Hiring for product manager roles, in particular, is not likely to bounce back soon, said ConnectOne’s Chow. These roles, along with marketing and recruitment, were among the most affected during the tech layoffs of 2022 and 2023.

“In my opinion, I don’t think product roles will recover. Marketing and business development roles will recover a little bit compared to 2023,” she said.

Technical roles, however, continue to see tightness in supply, especially in senior roles. That is still contributing to slightly inflated salary levels, said Yeo from Glints.

Startups are also showing an appetite for contract workers on a project basis, she said. This allows flexibility for companies that might need some extra hands to get things done, and provides an option to extend contracts should the need arise.

“We have seen quite a bit more pickup of interest in that arrangement,” she added.

She said that the supply of junior talent has expanded after recent layoffs, easing the tightness in the labour market. Junior employees, being cheaper and more mobile, are also likely to be hired faster than senior talent.

With a lot of senior roles cut during the latest rounds of tech layoffs, there is a far bigger supply than demand for talent.

ConnectOne’s Chow said: “Even this year, supply will outstrip demand for senior people, but supply will equal or may even exceed demand for junior people.”

Startups are not only facing competition from large tech companies the search for talent. Traditional companies are looking to bulk up their workforce too, and are eyeing the same pool of laid-off tech workers.

A market observer, for example, saw one candidate being pursued by a traditional company as well as a large tech company. Both were looking to fill a senior role and pulled out attractive packages to secure the hire.

EMA’s Mendon said: “We are seeing a lot of people from tech companies like Facebook and Google now moving into traditional companies like Honeywell or Schneider Electric. They feel that maybe if they move to that sort of company, they will get long-term employment and more prospects.”