Tech’s downturn is a good thing
Written by Paul Maher
It is always flattering for a PR pro to be covered by the media. It was however bittersweet to have my commentary on the mass layoffs of the tech sector picked up in PR Week.
Speaking about Tech PR, the article details how economic cycles are just that, cyclical. The economy powers through recessions and eventually comes back around. Even if that is hard to see at the time and especially coming off the prolonged bull run of the last few years.
The reaction in some quarters was odd. While the article is clear that layoffs are personal tragedies and disruptive on a personal level, they are an inevitable, if brutal part of corporate life. So it was a little disappointing when even this simple message was misconstrued as somehow crowing about redundancies. Having been the victim of Reduction In Force (RIF)s earlier in my career, I know how hard being let go is. But it is also a golden opportunity to reassess.
The Tech industry always has a leading place in economic cycles. Because when businesses kick into survival mode, innovation is first to suffer. Gambling on the future, essentially what all new tech investments are, takes a back seat to ‘keeping the lights on’. As perfectly natural as this sounds, it still stings and comes with real-life consequences for those laid off as businesses readjust to reduced circumstances. The beauty of tech is that first in is first out of recessions. The circle always turns.
This is not just a feel good message. It is the beauty of technology innovation and it happens much more rapidly in our world than in sectors where change is gradual. Tech firms will kill long-term projects faster, they will redeploy engineering and sales talent more immediately, will adopt automation for short-term upside and the curious creative minds of tech talent will create tomorrow’s solutions from today’s problems.
So where will these new green shoots come from? This is the question which those who have been trusted to deploy the billions in “dry powder’ are desperately seeking to answer. Even as some areas of tech are commoditised, notably mobile telecoms, cloud computing and social media tech, others are frantically experimented with. The rise of generative AI, blockchain tech outside of digital currencies and quantum computing are some examples of potential flywheel technologies, which could power the next generation of tech.
Some of the best advice I have heard recently came from one such self-styled ‘capital allocator’, the venture capitalist superstar, Jason Calocanis. His advice to those who until recently enjoyed six-figure salaries, onsite perks the envy of most of us and share options which seemed only to go upwards? Be grateful.
His point was that those who enjoyed the high life in the ‘free money’ part of the cycle, should be proud they were, correctly for the time, valued so highly. Their best option now is to either accept that was then and this is now, reassess if the stress of a job which ultimately ended, is the right path to continue on, or if they wanted to take an even riskier path and found a new tech firm in ‘revenge’. Its not the worst set of options.