Tech layoffs and the hiring opportunities for MSPs

Take a spin around LinkedIn these days, and you’ll see lots of profile pictures with a green frame and a hashtag: Open to work. While that hashtag often represents job loss for an individual, it can be a hiring opportunity for MSPs looking to expand their services.  

There is a crisis among technology employees that shows little sign of abating. Tech layoffs are at their highest level since 2001 when the dotcom bust wrecked the industry. Layoff trackers — and there are lots of them — do their best keep up with the daily toll, which seems to rise all the time.   

According to Layoffs.fyi, for instance, 380 tech companies had laid off more than 109,000 workers as of late July 2024. In 2023, more than 250,000 tech employees lost their positions.  

What does this mean for MSPs? Simply put, it floods the hiring market with qualified, experienced candidates who need work now. After rising for years, the cost of hiring IT professionals had begun to level out by early 2023. It doesn’t show signs of ticking up again, yet. Now is the time for MSPs to act. They just need to know how to do it wisely.  

One initial thing to understand is that most layoffs have little to nothing to do with employee performance. Most mass job cuts happen because companies simply can’t or don’t produce the results they or their investors expected.  

There are a lot of reasons layoffs happen. Now that COVID hasn’t been a business factor for a couple of years, companies find themselves with weakening demand and excess employees. Also, AI really does threaten jobs, and there are other factors as well: inflation, fears of a recession and even startups going out of business. 

The “good” news for MSPs is that many laid-off employees were in positions that are in demand among service providers. In fact, midway through 2023, the largest group of employees affected by layoffs was software engineers — and by a long shot, at almost 20% of all laid off employees. Many more have likely been laid off since, and many are probably still looking for work.  

Those are the people MSPs should look to hire, and here’s how they can do it. Essentially, the key is to approach available workers with respect and a sense of humanity while also making them offers they, in at least some cases, really shouldn’t refuse.  

Remember that being laid off is not always the result of poor performance. Remember that someone who has had six jobs in three years might be a job hopper or might have just had really bad luck with layoffs. Cast your net wide and give prospects a chance to explain their situations. You could find some hidden gems. 

Fake jobs are rampant — and major vectors for malware — on job boards and social media sites for professionals, including LinkedIn. Let people know you’re real by maintaining an attractive LinkedIn (or other job-related social media) profile with business details, news updates, team photos and a professional logo. Let people know where you’re located and that you’re hiring, and make sure your website is online and up to date.  

Don’t be afraid to post frequently that you’re hiring — just be prepared for the response you might get. Make your requirements and expectations clear and explicit and consider including a salary range in your posts and ads. 

Recent college graduates are often well trained, eager and able to work for less than more established professionals. You can sometimes spend less on hiring and training a younger employee than you would by hiring a more experienced person.  

Getting laid off is something like a traumatic experience, especially when it’s unexpected. Because of this, laid off workers will be especially careful when researching new companies. Not only this, but younger generations of workers expect their employers to offer more than the usual company perks; for example, a good work-life balance. You can distinguish yourself as an employer by promoting these attributes about your company, both online and in interviews. 

The spate of layoffs in the tech industry doesn’t seem to show signs of abating any time soon, but employment trends — like most economic indicators — are notoriously difficult to predict. (It’s no wonder former Federal Reserve Chairman Ben Bernanke compared making economic policy to driving a car while looking in the rearview mirror.)  

As such, MSPs should see the recent layoffs as an opportunity to find talent. The unfortunate circumstances and individual misfortune that come together to create layoffs can actually end up having a positive result for both MSPs and job seekers.