Over the past decade, the technology industry has become an undeniable economic driver, with giants including Apple, Amazon and Microsoft closing the decade as the world’s first trillion dollar companies.
These companies have grown even more during the Covid-19 pandemic. The sector has reported huge gains as consumers upgrade their devices and seek cloud storage during the pandemic shutdown.
But suddenly, tech companies are facing unprecedented challenges.
Last week, Silicon Valley Bank, a major U.S. bank that supplies the technology sector, announced massive write-offs amid fears of a global recession and recession, including the likes of Google, Microsoft, Amazon and a host of smaller tech outfits.
Paul Hershenson, co-founder of Art+Logic in Pasadena, believes there are several reasons behind this year’s layoffs.
“The outbreak has caused significant disruption to supply chains. It was a government stimulus that pumped money into the economy, this dramatic shift of the middle class from office work to remote work, many big tech companies made a lot of money because of the pandemic and it led to more. Hiring and then as the epidemic subsides and the economy begins to open up and inflation comes into play and interest rates, especially the environment for startups.
While several companies have announced layoffs, Art+Logic, one of the oldest and longest-running remote software companies in the United States, has not laid off any employees in the past two years.
Because Art+Logic was working remotely even before the pandemic, Hershenson said it was easier for them to retain employees and prevent layoffs.
Art+Logic started as a remote software company in 2011.
When we first started in the 1990s, the reason we got the office was because it was unusual to be a remote company, and it was difficult to convince clients that we were a real company, and we couldn’t convince banks that they were a real company,” Hershenson said. “One of the benefits of the pandemic is that the world has caught up with us in terms of remote work, and at this point no one bats an eye at a tech company that doesn’t have an office. “
“We were prepared, so we didn’t have to make any adjustments to working remotely,” Hershenson said. “Before, we were working remotely. Our office fees are very low compared to companies with real offices; So you know we didn’t have to worry about cutting costs that way.
Hershensen added that the real impact for Art+Logic is secondary, as customers have to cut costs as it drives down their revenue.
While the remote control worked for Art+Logic, Hershensen knew it wouldn’t apply to other companies. “Remote work environments are context dependent,” he said. “And it’s certainly something a business should consider for their own purposes.”
Hershenson said this in the context of the current challenges technology companies are facing today.
“I’m sure things will work out with time. And I expect that employment will be very high, and those who have been laid off will find good jobs. And let the companies that can weather the storm keep a steady hand at the helm and in time we will all calm down and things will be fine.
Harrison Tang, CEO of Pasadena-based people-finding website Spokeo, has no plans to lay off workers — but to do the exact opposite.
Tang remains afloat despite his brush with the SVB bank crisis. Spokeo emerged unscathed.
“We were growing our own cash flow,” Tang said. “We’re not making any layoffs. We’re really trying to use this opportunity to grow our team.”
“It’s really an amazing opportunity to invest in our companies, our teams, our products in some way so we can use this opportunity to gain more market share and win the competition,” he continued.
Tang Spokeo recently hired new employees.
Like Hershenson, Tang’s company moved to remote work early in the outbreak. Eventually, people embraced flexible work arrangements that gave them the option to work at any time, either in the office or at home.
Unlike other companies that force their team members back to the office, we are very open. We said, ‘Hey, he’s here if you want to come. If you don’t want to come. it’s good’.”
While telecommuting works for the company, Tang isn’t sure it will work for others.
He believes the future of work must be “personalized.”
“I don’t think we should make a blanket rule, do we? Three days a week everyone is back in the office or everyone who can’t come to the office works from home.
He continued: “We need to focus on personalization. And I think to get there you need to build infrastructure, governance structures and all those things. You have to ask for more, and that may require more staff.
For more information about Art+Logic, visit: https://artandlogic.com.
More information about Spokeo is available at: https://www.spokeo.com/about.