Photo: Getty Images/JasonDoly
Do Silicon Valley’s layoffs present an opportunity for retail?
Laid-off workers from Meta, Google, Twitter and other tech hubs are creating a rare opportunity for old-school sectors such as retail to snag skilled talent and accelerate digital plans.
“This is an opportunity for those industries, that have traditionally lagged behind in digital transformation and cybersecurity, to hire talent at a level they may not have been able to before when the tech industry was gobbling them up,” Simone Petrella, CEO of CyberVista, a cybersecurity training and development company, told CNBC.
Among others that have laid off workers are Shopify, Salesforce, DoorDash, Lyft, Klarna, Robinhood, Stripe, Coinbase, Netflix, Microsoft, Peloton, Snap and Tesla. In many cases, the layoffs stem from a quicker-than-expected slowdown in online growth after ramped-up hiring during the pandemic. Plunging technology valuations and a dormant IPO market are also hurting the job appeal at tech upstarts.
In an article for Harvard Business Review, Vijay Govindarajan, a professor of management at Dartmouth College’s Tuck School of Business, and Anup Srivastava, a professor and specialist in digital disruption at the University of Calgary, said that, beyond recruiting laid-off workers with sought-after skills, including artificial intelligence, automation and data science, opportunities to poach employees may be more available with stock options likely underwater.
The professors wrote, “A year ago, an aspiring, young, software engineer would probably be more inclined to join a crypto exchange than the e-commerce division of a bricks-and-mortal [sic] retailer. Now, with technology companies reducing staff, a bricks-and-mortal retailer, or any company with sound fundamentals that has yet to completely modernize, can now outcompete tech companies in hiring the talent it needs.”
Demand for tech skills reportedly still remains strong, however, and retailers will be competing with other traditional sectors such as health care and the government that have also faced challenges competing against flashy tech gigs. Retailers such as H&M and Gap have announced their own layoffs amid a worsening economy.
Continued tech turbulence nonetheless could have candidates looking at more stable firms. A Recode article details how Amazon’s layoffs announced in November and its moves to rescind job offers risked damaging its reputation in the job market for tech talent.
- Laid off tech workers from Meta, Google and Twitter are being wooed by the federal government – CNBC
- How Fashion Can Build Its Own Tech Talent Pipeline – Business of Fashion
- Tech Talent Is Flooding the Job Market – Harvard Business Review
- Big Tech Laid Off Thousands. Here’s Who Wants Them Next – Wired
- Here’s a rundown of tech companies that have announced layoffs in 2022 – CNBC
- Layoffs, buyouts, and rescinded offers: Amazon’s status as a top tech employer is taking a hit – Recode
Discussion Questions
DISCUSSION QUESTIONS: Do you see the layoffs in the tech sector creating a near-term or long-term recruiting opportunity for retailers? What are retail’s strongest selling points in seeking to attract tech talent?
Poll
Loading …BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
The retailers who recognize that creating a technology-led culture can create a long-term competitive advantage will also be those that recruit from the talent pool cast aside by Netflix, Amazon and Meta. Maintaining investments in innovation — even in down times — is critical to sustained advantage, and talent is the key to innovation.
There is definitely a greater pool of technology talent available for retailers to tap. The question will be if retailers are willing to pay the high salaries these employees have come to expect. As some tech workers have harder times finding new roles, maybe they will accept lower salaries in hopes of more stability. However, retail is not necessarily the most stable industry.
Not only will retailers have to pay the higher salaries, but they also have to be willing to invest in major infrastructure if they don’t have it to support the work expected from these experts.
Unfortunately, I think retail is further down the list of “preferred” industries for the most talented tech people. However, retailers like Kroger and Nike, who have shown a longer commitment to leveraging tech for competitive advantage, should be able to attract some great talent.
Tech layoffs present an interesting opportunity for retail, but I wonder if they can afford them. Tech companies have been using investor’s money to hire the best, brightest and most expensive tech developers in the US. Just two years ago, I remember doing some research for a president that was looking to hire a specific developer, often found at companies like Google and Meta. The salary price tag was a whopping $700K a year. They ended up hiring a junior developer and never got the innovation off the ground. Will tech developers let go from the giants expect the same salary?
Even if that former employee is willing to work for $350K, they are well beyond what a retailer is willing to pay. The result: retail will get the junior person and fail at what they want to accomplish.
I agree with most of the comments that tech talent doesn’t come cheaply — especially from some of the biggest names in the industry — and it may be more than most retailers are willing to spend. (Not to mention the benefits, culture and work environments at most of these employers.) There are likely to be higher bidders for this talent, with some exceptions. (And it sounds like Southwest Airlines could stand to hire some new tech talent too.)
Maybe to a small extent; but of course retailers face their own challenges. So while a successful retailer might have it incrementally better than a year ago, just incrementally, and that’s entirely due to the “successful” part, not the retail part.
“Demand for tech skills reportedly still remains strong, however, and retailers will be competing with other traditional sectors such as health care and the government that have also faced challenges competing against flashy tech gigs.” Not to mention six-figure salaries. Retail doesn’t have a chance to get the best and brightest.
If a retailer has difficulty hiring and retaining great front-line workers and managers, why would they think they will be able to hire great tech talent? If retailers want to be what I call a Five-Star Employer, they need to offer the environment/culture and benefits that All-Star Employees want at all levels.
My challenge to retailers is that they need a Unique Employment Proposition to hire the best for all positions. The top 10 reasons why All-Star employees in any position would want to come to work for them. If they can not come up with the list, where will that Star employee get the list?
One last comment based on the pay question. It is not how much you pay. It is what results you get for what you pay.
Was just out in the Valley over Christmas — the layoffs have not made a dent in housing demand and prices, nor in office space going up. The numbers of exiled staff being reported in the media look big from the rest of the country’s perspective, but are just a drop in the bucket for overall employment out there, as many will be starting their own companies or joining California-based startups.