Every week seems to offer fresh staff cuts at the big tech companies right now. Several of the giants are already on their second rounds, and few would probably bet against a third after those. But as hard as it is on an individual level – and it's always hard! – there's a silver lining for the economy as a whole: Releasing captive talent.
See, the big tech companies gobbled up so much talent at such high salaries during the pandemic that it scarcely left any for the rest of the economy. So many companies outside of big tech were priced out of the competition for key tech hires. That just can't be good for the economy in the long run. We need smart people focused on other problems beyond figuring out how to make people click more ads.
But while the mammoth cuts at Facebook, Amazon, and elsewhere are dominating the headlines, there are also cuts happening at smaller tech companies, and I'm far less convinced those have a silver lining.
Sure, it's possible that some of these companies got out over their skis, just like the giants, and hired a bunch of people they not only didn't need, but who ended up slowing down progress rather than speeding it up. If so, pulling back makes sense.
But it's also possible that these companies are simply having to layoff people because the market for their technology is contracting, and because investors are no longer willing to extend the unprofitable runways. That is, they're firing people to cut costs, such that they won't go out of business. That's prudent, but people aren't the only cost.
At the majority of tech companies I've talked to, there are basically two big line items: staff and cloud. Staff is usually the biggest, but it's shocking how large the cloud bills can be as well. Or, rather, it's not shocking at all to anyone who've actually run the numbers, so perhaps a better word is "grotesque".
I know I'm probably sounding a bit like a broken record on this cloud business, but it just frustrates me to no end to see tech companies trying to cut costs by firing folks rather than reigning in their cloud spend. And the best way to do that, especially for mid-tier software companies and above, is to actually leave the cloud either in part or in total.
So I urge any of the founders and executives looking at their budgets right now wondering where to trim the fat to focus on the cloud spend first. Maybe you can get a long way by just optimizing what you have (there's an entire cottage industry springing up to help with that!), but maybe you're also overestimating how difficult it would be to buy your own hardware and exit the cloud.
We're about half way through our cloud exit. We only really started in earnest in January. And we're moving out apps from across the legacy spectrum, not just state-of-the-art modern stuff. It's been way easier and way faster than I had dared hope for. We're far ahead of schedule on the exit, and the big savings are in clear sight.
If we can do it this quickly, you owe it to yourself to at least run the numbers, and look at your options, if you run a business. And you certainly owe it to your employees before you start printing those pink slips.
See, the big tech companies gobbled up so much talent at such high salaries during the pandemic that it scarcely left any for the rest of the economy. So many companies outside of big tech were priced out of the competition for key tech hires. That just can't be good for the economy in the long run. We need smart people focused on other problems beyond figuring out how to make people click more ads.
But while the mammoth cuts at Facebook, Amazon, and elsewhere are dominating the headlines, there are also cuts happening at smaller tech companies, and I'm far less convinced those have a silver lining.
Sure, it's possible that some of these companies got out over their skis, just like the giants, and hired a bunch of people they not only didn't need, but who ended up slowing down progress rather than speeding it up. If so, pulling back makes sense.
But it's also possible that these companies are simply having to layoff people because the market for their technology is contracting, and because investors are no longer willing to extend the unprofitable runways. That is, they're firing people to cut costs, such that they won't go out of business. That's prudent, but people aren't the only cost.
At the majority of tech companies I've talked to, there are basically two big line items: staff and cloud. Staff is usually the biggest, but it's shocking how large the cloud bills can be as well. Or, rather, it's not shocking at all to anyone who've actually run the numbers, so perhaps a better word is "grotesque".
I know I'm probably sounding a bit like a broken record on this cloud business, but it just frustrates me to no end to see tech companies trying to cut costs by firing folks rather than reigning in their cloud spend. And the best way to do that, especially for mid-tier software companies and above, is to actually leave the cloud either in part or in total.
So I urge any of the founders and executives looking at their budgets right now wondering where to trim the fat to focus on the cloud spend first. Maybe you can get a long way by just optimizing what you have (there's an entire cottage industry springing up to help with that!), but maybe you're also overestimating how difficult it would be to buy your own hardware and exit the cloud.
We're about half way through our cloud exit. We only really started in earnest in January. And we're moving out apps from across the legacy spectrum, not just state-of-the-art modern stuff. It's been way easier and way faster than I had dared hope for. We're far ahead of schedule on the exit, and the big savings are in clear sight.
If we can do it this quickly, you owe it to yourself to at least run the numbers, and look at your options, if you run a business. And you certainly owe it to your employees before you start printing those pink slips.