Original WSJ article here by Asa Fitch
Propelled by mega-financed investment, Silicon Valley has developed a reputation for building up promising startups into major corporations at light speed, a gamble that can either result in major success or colossal failure. However, the COVID-19 pandemic, which already has devastated most labor industries, has begun taking its toll on California’s global center for high-tech, innovation, venture capital, and social media industries.
Even though Microsoft Corp. and Amazon.com Inc. have benefited from the pandemic by reporting soaring quarterly sales, Silicon Valley’s other large corporations in addition to numerous smaller startups have been shaken to the core.
Naturally, with few places to travel and a fear of sharing cars or renting homes from strangers due to COVID-19, the sharing economy business has been crushed.
Within just a few weeks Airbnb Inc. announced it will be cutting 1,900 of its 7,500 employees, Uber Technologies Inc. announced it will be laying off an additional 3,000 employees after already cutting 3,700 personnel in customer support and human resources. Unlike Uber, Lyft Inc. is unable to offset some of its financial losses with a food-delivery business and was forced to announce it could slash 17% of its workforce
Silicon Valley’s smaller startups have already laid off more than 56,000 of their employees due to the pandemic, according to Layoffs.fyi, a job-tracking web site.
Just because Silicon Valley’s other large tech corporations are not falling apart does not mean they are proceeding without caution. Microsoft has briefly frozen recruitment for some roles and Google has slowed down on hiring new people.
What does this mean for job seekers seeking a lucrative career in Silicon Valley?
In a market overflowing with expertise, industry experts believe Silicon Valley’s tech giants will wait to find the elite talent and not take a risk on hiring those with thinner résumés even if it means taking a bit of a financial loss in the short term.
Still, experts say this cautious approach can benefit smaller tech companies who in the past may have lost out to the bigger companies on attracting more experienced talent who can afford to gobble up any and all talent.
However, not all of Silicon Valley’s corporations are erring on the side of caution. Some tech giants are choosing to take bigger risks on their fastest-growing divisions. For example, with many consumers stuck at home under Covid-19 lock down, Amazon Internet Providers and Zoom Video Communications Inc. are taking the opportunity to hire more employees to meet the rising demand.
“Why would you not try to double down if you have the cash to be able to leverage that?” Jonathan Buzelan, the co-founder of RecruitrLabs, a leading talent recruitment agency told The Wall Street Journal.
Perhaps the sun will shine brightly once again on Silicon Valley, but in the meantime job seekers in the tech industry need to play their cards right to stay in the game with the big boys.