Tech’s uninspiring hiring and firing

Tech will always need talent to thrive, which means the current industry job cuts, while improving margins and reducing cash burn, can pose a threat to innovation.

Companies realise this and appear to be more sophisticated in the current rounds of hiring and firing, with recruitment freezes instead, in some cases, and selective hiring.

Lex says this also follows an epic Big Tech binge of hiring. Between the first quarter of 2020 and 2022, Amazon’s workforce nearly doubled to 1.6mn. Headcount at Facebook’s parent company Meta rose more than 60 per cent to over 77,800. Alphabet’s employee base increased by a third.

But then US tech sector lay-offs exceeded 138,000 in the second quarter, according to tracking site Layoffs.fyi, with fast-growing companies like Coinbase and Tesla prominent in letting people go.

In Japan, the emphasis is on finding and hiring talent, with companies wondering how to recruit enough engineers to satisfy the government’s push to revive the domestic chip industry. The number of workers aged 25 to 44 in electronic components, devices and circuits dropped from 380,000 in 2010 to 240,000 in 2021, according to data released by the Statistics Bureau of Japan.

There were mass lay-offs of engineers following the global financial crisis in 2008 and this has led to not enough senior experienced engineers today. The Japan Electronics and Information Technology Industries Association estimates that eight big producers will need to hire about 35,000 engineers in the next 10 years to keep up with their pace of investment.

To spur innovation and groom prospective employees, Toshiba, Sony and others are teaming up with the best science departments nationwide, pouring additional funding into chip research and recruitment.

But it is a race against time. A series of semiconductor manufacturing plants are set to come online, but the production line of engineers to run them is clearly a step behind.

The Internet of (Five) Things

1. Naspers to sell down Tencent stake
The SoftBank of South Africa’s most lucrative investment has been Tencent and Naspers said on Monday it would begin selling down its 29 per cent stake to help finance share buybacks. Shares in its Dutch-listed entity Prosus rose 15 per cent on the news. But Lex says the timing is a little off, with Tencent’s stock having halved in value from its peak.

2. Wise CEO investigated, Binance approval questioned
The UK’s Financial Conduct Authority has launched an investigation into Kristo Käärmann, the co-founder and chief executive of payments app Wise, over deliberately defaulting on tax payments. The French markets regulator is facing a backlash over its decision to approve crypto exchange Binance last month, with one European lawmaker describing the agency’s decision as “incomprehensible”.

3. EY’s NSO valuation under scrutiny
EY, the Big Four accounting firm, valued the secretive Israeli spyware company NSO Group at $2.3bn just months before it needed emergency funding in a cash crunch and its equity was deemed worthless, report Kaye Wiggins and Mehul Srivastava.

4. The dark fibre side of the UK’s rollout
BT’s Openreach and Virgin Media O2 have led fibre rollout in the UK, but more than 50 altnets (alternative networks) of varying sizes and ambitions have secured about £15bn from private investors and banks in order to grab themselves a share. The question now is how this market will shake out, reports Anna Gross.

5. Japan struggles without Internet Explorer
While few users will mourn Microsoft’s discontinued browser, 49 per cent of organisations in Japan were apparently still using it in March, leading to a major headache for companies when support was halted in June.

Tech week ahead

Wednesday: A former general counsel at Sequoia Capital’s India outfit, who left the firm in 2019 to launch his own law firm, has filed a defamation suit against the venture capital firm. Sequoia has urged the court to dismiss the suit, saying it limits the VC’s free speech rights.

Thursday: Memory chipmaker Micron Technology is expected to post a rise in third-quarter revenues, driven by strong demand for its chips from data centres.

Tech tools — Piega Coax Gen2 series

The Swiss luxury loudspeaker specialist Piega has announced a September launch in the UK for four new models in its Coax range. They feature an all-new coaxial ribbon tweeter/mid driver and upgraded aluminium cabinets. The models are the Coax 811, 611, 411 and Coax 211 Centre. The sound may be ear-popping and the price tags are certainly eye-popping at £26,900 a pair for the flagship 811. What Hi-Fi? has an early appraisal.