At the beginning of this year, we wrote a piece about how mass tech layoffs have led to a new wave of startups. The global economic downturn that started in the second quarter of 2022 is beginning to have a major impact on tech companies.
In the first half of this year, tech giants including Meta, Google’s Alphabet, and Nvidia have also announced layoffs. For example, in March, Facebook-parent company Meta announced it would cut 10,000 jobs, just four months after it let go of 11,000 employees, making the social giant of the Big Tech companies with the highest job cut. To date, at least 746 tech companies have let go of 202,259 workers, according to Layoffs.FYI, a site that has been tracking all tech layoffs using data compiled from public reports.
But it’s not all bad news for laid-off tech workers. A recent survey of new hires published in the Wall Street Journal found that most laid-off tech workers quickly found jobs shortly after beginning their search, as employers continue to struggle to find qualified workers in a tight labor market. The survey, which was conducted by a ZipRecruiter, found that about 79% of workers recently hired after a tech-company layoff or termination landed their new job within three months of starting their search while others have started their own companies.
Fast forward almost half a year later, a new study conducted by BizReport found that a small percentage of laid-off workers have started their own companies, igniting a new wave of startups.
During their research, BizReport conducted a thorough examination of the LinkedIn profiles of individuals affected by layoffs using the data from layoffs.fyi, with the aim of uncovering an intriguing answer. What they discovered is nothing short of astonishing and is sure to captivate everyone’s attention.
“First, BizReport used layoffs.fyi‘s List of Employees Laid Off to find the LinkedIn accounts of people who had been fired. Then, we went to each LinkedIn page to see if they became founders, presidents, or business owners after losing their jobs,” BizReport wrote.
Below are the major highlights from their study:
- For every 100 people who lost their jobs, 13 started their own companies.
- Meta generates the most startups from recent layoffs. One out of every three former workers in Meta starts their own business.
- After being laid off, software engineers are most likely to start their own companies. Nine out of one hundred startups are established by former software engineers.
Below is a list of other companies with more than 15% of their former employees becoming entrepreneurs:
- DoorDash | 30%
- Amazon | 25%
- Flexport | 24%
- Twitter | 16%
- Shopify | 15%
BizReport also found that after being laid off, software engineers are most likely to start their own companies. In addition, nine out of one hundred startups are established by former software engineers. Management-level personnel are more likely to launch a business following a layoff. 44.4% of examined companies were founded by former managers and directors.
You can find the full study here at: https://www.bizreport.com/business/from-layoff-victim-to-founders
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- Source: https://techstartups.com/2023/06/08/13-out-of-every-100-laid-off-workers-started-their-own-businesses-sparking-a-new-wave-of-startups/
