Tech bubble has burst

The latest series of layoffs from big tech companies and Twitter show that the tech bubble is bursting, and we risk seeing many more businesses follow suit. The pandemic called for companies to hire tech talent in swathes as they raced to adapt. That digital race has not only slowed but been stalled by a recessionary environment that is putting the brakes on tech spending. This means most businesses no longer have the capital to retain all the employees they brought on board.

It’s worrying that large businesses like Amazon have been so short-sighted with their hiring, particularly of tech staff. Hiring and firing is not only expensive but can damage employee morale and carry reputational damage that impacts future recruitment. Not to mention the effects on livelihood during economic troubling times. To avoid making the same mistakes,

businesses have to be less rigid with how they manage their workforce. Certainly, an over-reliance on teams exclusively made up of permanent employees is a recipe for disaster.

That’s not to say that having permanent, retained staff is not important for business continuity. But it should be supplemented by an on-demand workforce made up of freelancers, that can be scaled up and down as required and in line with market disruption, without needing to cut ties with valuable employees. Until businesses find more flexible ways to engage talent, they will always be vulnerable to economic headwinds and risk needing to make lay-offs.

Callum Adamson CEO and co-founder, Distributed