Tue 2 Aug 2022
There’s no doubt that over the past couple of months companies have made efforts to tighten their belts in this economic downturn, and the majority of them have announced massive layoffs.
No industry has been spared – from the recent layoffs of Crypto.com to the Southeast Asian group’s e-commerce arm, Shopee, which cut staff in food and payments business units. Even global companies such as Tesla have also shut down local operations and non-revenue generating departments.
But as with any economic downturn, not all businesses are affected equally. Profitable, cash flow positive businesses are in good shape despite changing consumer demand. Cautious tech startups with a strong unit economy will continue to attract funding and are therefore likely to continue hiring.
On the other hand, early-stage businesses that do not have a strong cash position or are very reliant on liquidity (i.e. buy now, pay later (BNPL), credit or loan ) or businesses holding inventory like retail and e-commerce be negatively impacted.
It’s unclear how long the bearish environment will last, with the US Federal Reserve announcing its largest interest rate hike since 1994, inflation in all countries is expected to continue and a recession could strike any day in the future. the other.
In Southeast Asia, we see technology companies preparing and taking various measures to adapt to the current climate. And despite the current economic situation, tech talent remains attractive and in high demand. Startups and companies that are in a strong financial position have the opportunity to take advantage of the current tech talent pool.
We recently saw major cuts across the board from edtech company Zenius, fintech company Lummo, and e-commerce company JD.ID. Overall, a wave of companies is reducing non-revenue-generating roles.
Yet roles such as engineering, data science, and product roles continue to be in high demand. These tech talents are now being offered 20-25% pay raises, up from 15-20% in the current climate.
Despite offers with significant salary increases, high-quality talent is suspicious or meticulous before accepting them. Indeed, some startups that were hiring massively before this market correction are now laying off massively. However, strong talents will exercise due diligence and turn to prudent and profitable ventures.
We also expect more employers to introduce fixed-term contracts (e.g. one-year contracts), for example. We are also seeing companies turning to hiring on a project basis when possible. For smaller or start-up businesses in Indonesia, now is the time to hire talent from high-tech companies that are downsizing or downsizing.
We believe that a comprehensive talent ecosystem should not just be a single job match, but a platform that can support both talented professionals for their lifelong career development and businesses that are looking for the right team members who are aligned with their business. Goals.
So what’s the next step?
We believe that cross-border remote work will continue to be a trend. On our platform alone, we’ve seen remote work listings grow 3x year-over-year (yoy) as employers shift to a more borderless approach and grow more interested by hiring talent in Southeast Asia. In fact, remote job opportunities on the platform have grown 10 times a year.
That doesn’t mean employers are going on a massive hiring spree, though. However, they hire smartly in alignment with their business strategy – whether that means increasing operational cost optimization or maintaining the ability to act on opportunities while ensuring the sustainability of their business.
Ultimately, we believe the current layoffs are a market correction rather than a long-term trend. Given Southeast Asia’s strong macro-economies as a digitally-driven region, a growing middle class and the strength of homegrown tech talent, we remain confident that Indonesia will continue to grow. be a market to bet on.
The writer is co-founder and national director of Glints.