Layoffs from startups find a bustling market, if the profile is technology

Specialist professionals laid off in the wave of cuts by startups in Brazil are finding replacements quickly, indicating that the demand for technology workforce remains intense in the country, although the dismissals may signal fragility in the sector at a time of high interest rates in the economy.

A survey by Robert Half, a company that recruits skilled workers, points to the creation of 19,376 vacancies for these professionals in the first quarter of this year, with the technology sector leading the ranking among the 19 surveyed, with a balance of 5,775 vacancies.

The numbers are based on data from the Ministry of Labour.

Data scientist Renata Martins was fired in early June in a cut that affected 12% of the staff at Empiricus, a BTG Pactual company focused on content and financial market analysis.

However, she said that new job opportunities began to appear on her LinkedIn hours after posting a text on the social network about the dismissal. The post garnered more than 6,000 reactions.

“It was all very fast. I received many messages, more than 400 private messages with job opportunities”, she said, considering that, at times, she received contact from people from the same company or from vacancies not related to her work. “The (technology) market is overheated. That’s what it looks like, they’re hiring,” she added, who already has a new job but for confidentiality reasons she couldn’t give details.

Part of this effervescence is due to the effects of the pandemic itself, which accelerated the process of business digitization. “’Timing’ is very important for IT, if you don’t have manpower, projects don’t run”, said Franciele Alves, founder and executive president of Feel Tech RH, a company that recruits professionals in information technology.

French engineer Kevin Chevallier, who has been in Brazil for 14 years, was fired at the end of May from the Brazilian platform for digital commerce VTEX, along with about 11% of the company’s employees, or 193 people. Days later, he said, he had already received about 250 job contacts, of which, according to the professional, about 70% in the first 48 hours. He is now on the Free Market.

Those who look at the numbers at the end of June from the layoffsbrasil.com platform, a site created to relocate technology professionals, sees more than 3,000 layoffs in the country in the sector this year, a balance that until recently was unthinkable given the billions of reais contributed to startups in the country in recent years.

The cuts included icons such as digital real estate QuintoAndar, automotive portal Kavak and fintech Ebanx just to name a few unicorns, as startups valued at at least $1 billion are known.

But there is a view from recruiters that this process of layoffs is within a cyclical movement of the market, with experts from the venture capital industry expecting that this cycle of adjustments in the startup sector is expected to last around two years, when a reversal of the rising cost of money, as Reuters showed in June.

“The marketing issue in the technology job market is completely separate,” said Alves, from Feel Tech RH. “We have a hard time hiring someone with two years of experience,” he said. She cited factors such as several counter-proposals, which, according to her, is uncommon in other sectors, and salaries that reach “executive” levels.

According to Maria Sartori, associate director at Robert Half, the cuts in startups are part of “a market movement that would inevitably happen. The unicorns came in with a lot of money and hiring in droves.”

Sartori said that, based on her experience and Robert Half’s business, the current average for a hire is a 15% to 20% increase in salary from the previous job, but that he “came to see” this percentage in “30 %, 40%, 50%” in the case of startups. “To attract the best professionals, most of the time, they (companies) leveraged their salary.”

Martins, who was at Empiricus, admits that “when I talk about my salary expectations, some companies get scared”. She said, however, that many companies, especially startups, “want a data scientist to do it all,” in the absence of other skilled professionals. “It’s an area that is growing a lot, but we don’t do magic.”

Not everything is flowers

Mechanical engineer Eduardo Bravin joined Mexican startup Kavak at the beginning of its operation in Brazil in 2021, but was fired along with 300 other people from the Brazilian operation in June, according to data from layoffsbrasil.com. Kavak did not respond to requests for comment on the numbers.

Despite having just been fired from the startup, Bravin said he still hasn’t received job offers, just a few contacts.

“Generally, people from startups are easily allocated to other startups, they don’t have much difficulty. But the vast majority who left Kavak were from a more technical sector. What are they going to do in another startup that is not connected to a car?”, said the engineer.

Tech vacancies are being closed by layoffs in startups, but they are not the majority, according to experts heard by the report and based on information from the cut lists released on platforms such as layoffsbrasil.com.

“The ‘tech’ market is not being hit so hard, if you look at the (replacement) lists, there aren’t many tech people,” said Bruno Marcelino, IT recruiter who was fired from the small health insurance startup Sami companies last month.

Marcelino, who is in a technology-related area but is not directly “tech”, said he received about 30 contacts in the hours following the shutdown.

“The other day, I did an interview from 8 am to 6:30 pm,” he said, adding that he had already seen the possibility of a general cut in the company amid similar measures taken by other startups. He went to the technology services consultancy inventCloud.

“I am worried about the sales and marketing team, when we think about technology, it is much faster (replacement), the market is very heated.”

The good news is that some characteristics of former startup employees attract recruiters regardless of job title, according to Robert Half’s Sartori. “It is a profile that is highly valued in the market. The person is challenged to do other activities that are not within their box. Things in startups change very often,” she said.