But supply is starting to catch up to the huge demand for talent, though the labor market is still tight. The chief executive of talent marketplace Expert360, Bridget Loudon, said on Thursday that the shift prompted the company to do a small round of lay-offs, affecting seven staff.
“There are more talented engineers at the moment,” Loudon said. “This is largely driven by lay-offs in the tech sector from the majors (Microsoft, Klarna, Atlassian, Linktree) to earlier-stage companies.”
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Linktree declined to answer questions about its finances but confirmed there had been no changes to its perks and benefits or plans to move to the new office despite the lay-offs.
In a blog post on Tuesday, chief executive Alex Zaccaria stressed his sadness at the lay-offs. He said the company had made big plans and hired to meet them on the assumption that the strong economy of 2021 would last.
“Instead, conditions changed faster than expected and those assumptions I made were wrong,” Zaccaria said.
A spokesman for Immutable said the lay-offs were a hard choice but necessary and the company was continuing to grow in other areas.
Eucalyptus chief executive Tim Doyle said the company was not changing its use of perks because they helped build its culture and brand. “They are things we want to preserve,” Doyle said.
Justin Angsuwat, chief people officer for the venture capital fund Blackbird, said he had spoken directly to more than a dozen founders recently about how they should approach perks in the downturn.
Contrary to others’ views, he said perks alone were ineffective for companies.
“All the data shows that very few perks on their own drive any employee retention or high performance,” Angsuwat said, in contrast to things like leave policies and promotion opportunities.
He said start-ups would make different calls based on their finances and culture. Some were cutting perks quickly because it was better than having to lay off staff. Others were adjusting their perks to ensure they were more closely linked to their company values, which was effective at keeping and motivating staff.
“During a bull run market… the trade-off is deciding which one of these perks do I spend $1 on,” Angsuwat said.
“In the current market, the trade-off isn’t between which perks to spend it on, it’s between perks and headcount or perks and runway [how long before the company runs out of money]so the equation is very different.”
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