Tech layoffs turn talent hiring into employer’s market

TECH companies are quickly shedding jobs, marking a reversal of their hiring rampage over the last few years. And salaries are starting to ease from the giddy levels reached during the height of the tech talent grab.

But there’s an upside – talent is quickly being soaked up by startups and other employers.  

Layoffs have swept through the tech ecosystem as companies – from giants Meta and Sea to online classified ads platform Carousell and hiring startup Glints – strive to cut costs and preserve cash. 

At least 1,270 tech jobs held by Singapore residents were axed from July to November this year, a surge from the 260 Singapore resident jobs cut from January to June, according to figures released by the Ministry of Manpower in November.

The tally is also higher than the sector’s annual average of 790 resident workers retrenched in the past five years, and does not count retrenchments of foreigners employed in tech jobs here.

The surge in job cuts initially impacted employees in the talent acquisition field. But now, roles being made redundant include those in engineering and even data analytics, noted Elena Chow, founder of talent consultancy ConnectOne.

“I have been running a daily office hour for retrenched professionals from mid-November and found that the background of those who sign up are very diverse, such as public policy, product and project management,” she said.

The technical talent being axed is quickly being soaked up by startups, though. Demand among early growth-stage startups remains the same, said Chow. But supply has increased to the point that these startups don’t need specialist firms like ConnectOne to help them recruit, she added.

“More tech talent is either freed up due to restructuring or just general anticipation of restructuring, and hence employees are looking out – even if they still have a job – to supposedly more stable companies, that is, newly-funded startups. Paradoxically, well-funded early-stage startups with good growth traction can be considered more stable than large tech companies today,” she said.

Some growth-stage startups are actively on the lookout for high-level hires from the pool of those laid off from tech companies.

“We have received several enquires from growth-stage tech companies looking to snap up high calibre senior talent that might have been laid off by big tech,” said Akshay Mendon, client partner at recruitment consultancy EMA Partners.

There is now a higher ratio of jobseekers to job openings, but demand over the next six to eight months will be high for senior-level jobseekers in certain sectors, Mendon added.

“Most of those affected are fresh graduates or new joiners at the mid-senior level, following the policy of ‘last in-first out’,” said ConnectOne’s Chow.

Salaries are also staying relatively flat or, at best, seeing single-digit growth, according to jobs platform Nodeflair. The platform relies on data such as user submissions verified by payslips or offer letters and job advertisements.

The slowdown in funding, combined with hiring freezes and mass layoffs as well as a bear crypto market have caused salaries to decelerate, said Adrian Goh, co-founder of Nodeflair.

For software engineers, which were among the roles most in demand, salaries rose 22 per cent through 2021, Nodeflair said in a report released in February 2022. For lead roles, the increase was as much as 32 per cent.

Nodeflair put the median monthly base pay for junior engineers at S$4,750 last year, while the equivalent for mid-level and senior software engineers stood at S$6,500 and S$7,500, respectively.

“It is difficult to accurately predict how the market will shift in 2023. However, it is unlikely that we will see another spike in tech salaries similar to that we saw in 2021, in the near future,” Goh said.

Those looking to change jobs are seeking high percentage increases in salary, but others are just looking to maintain their last drawn salaries, according to market watchers. As excess supply hits the market, those demanding high percentage increases will have to temper expectations in what is now an employers’ market, said EMA Partners’ Mendon.

ConnectOne’s Chow warns that even those looking to maintain their last drawn salary might find it tough. After the hiring freeze in late 2021 and early 2022, their salaries might no longer be in line with current market levels.

“Most job postings in Singapore do not have salary ranges, but I usually advise my startup founder clients to pay market value even if that means the candidate has to take a pay cut. This is the right time to recalibrate salary to market value and bring salary costs for companies to an equilibrium,” said Chow.

Compensation packages too have evolved with the times, with more people now preferring cash over share options, according to Nodeflair’s Goh. From a poll run in May, Nodeflair found 52 per cent of respondents preferred cash, 15 per cent preferred equity and 33 per cent said “it depends”. A more recent poll in November saw 62 per cent of respondents preferring cash, 15 per cent equity, while 24 per cent were undecided.

“This is likely due to the series of recent layoffs and drop in valuation of both private and public companies,” he said.

Employment in the tech sector continues to grow, according to MOM data. The first half of 2022 saw an increase of 7,000 residents employed in the information and communications (I&C) sector. Total resident employment in the sector stood at 136,100 as at June. During the five years from June 2017 to June 2022, resident I&C employment grew by an average of 8,100 per year.

But the demands of tech employers are changing, with more of them now hunting for multidisciplinary talent, said Nodeflair’s Goh.

“Demand for tech talents has shifted towards one that is more hybrid-orientated – one person wearing multiple hats. For example, a full stack developer instead of a pure front-end or back-end developer,” he said.

Tech companies are also seeking more senior roles in business development and customer experience, rather than hiring across all functions in late 2021 and early 2022. “We see this being driven by investor pressure on these tech companies to achieve a path to profitability,” said EMA Partners’ Mendon.