Insight

Big tech layoffs: Actually good news for the channel?

Last week, Amazon announced it will cut more than 18,000 jobs in a battle to save costs. This latest round of layoffs follows the significant cuts we’ve seen at tech firms including Meta, Salesforce and even more familiar channel names in HP and Cisco

Shockingly, at the time of writing, LayoffsTracker puts the number of tech industry job losses over the last 12 months at 272,053.  Moreover, VP of Channels, Alex Smith, commented at the Canalys Forum APAC in November, “in 2023, the top 25 vendors will cut their collective headcount by nine percent worldwide, which equates to 190,000 people.”

Canalys global VP Steven Kiernan this week commented that it was one of those predictions where no analyst relishes being accurate. However, “many technology vendors were simply too ambitious in their growth projections during the pandemic and the market is going through a correction,” he explained.

Layoffs aren’t all doom and gloom for the channel

In a recent article, we shared that IT vendors' over-investment in Partner Account Managers has led to them making adjustments in the face of industry change. With more channel leaders auditing their numbers, it may seem like there are difficult times ahead. But, are there actually some advantages to the market correction?

As one CEO commented, we’re now hearing of smaller vendors being able to hire talent more easily:

“[Before] the big vendors were just gobbling up people in their droves… [it was] very difficult to find good people because the big companies are just paying ridiculous money for them. And then putting them into roles and giving them nothing to do because they didn't have the work. So there is a little bit of equalization going on right now and probably will be for another three or six months, where the smaller companies will be able to get the talents that they need so badly.”

And, it's not just the small organisations benefitting from the expanding talent pool. With less competition from the big tech players, companies across the channel can enjoy higher levels of staff retention. Canalys CEO Steve Brazier noted this week, “channel partners will be relieved that vendors will be poaching far fewer of their staff in 2023. Indeed, the relative stability of the channel makes them attractive places to work right now.”

Tech Marketers are in particularly high demand throughout the channel. CompTIA’s IT Industry Outlook 2023 states:

“For many channel firms, marketing has lagged in both resource allocations and general attention. Few channel firms employ a full-time marketing staffer and the discipline itself has often been overlooked, but on the bright side, data of the last several years shows a more concerted effort around marketing and branding. Baby steps.”

The report revealed that 31 percent of channel firms will invest in hiring skilled sales and marketing employees over the next year. These roles would include sales reps that are adept at selling services and consulting contracts, along with marketing professionals with expertise in social media and other omnichannel approaches to customer communications.

In 2023, it could be that big-tech’s talent loss could be the channel’s gain.

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