Over the past week or so, we’ve witnessed an increase in layoffs across the start-up ecosystem, from buzzy, big names to smaller players. These are some volatile times in the tech sector and some will say that a reset for tech companies has been on the cards for some time.
This first impacted public tech companies and then slowly trickled down to late-stage deals and even their well-funded early-stage counterparts. The impact may be traced back to those companies’ pandemic expansions and anticipation of it being harder to get capital as public market valuations decline.
We don’t yet think that the tech slowdown necessarily means a broader hiring slowdown is on the way in the sector, we are yet to see the impact in our MENA and APAC offices. The overall job market is still red hot, and many who have been laid off will, in our opinion, quickly find new homes. The UAE has positioned itself very well, in terms of continuing to evolve its regulations to attracting talent and keeping the economy moving.
It had a good coronavirus response and it feels stable and more secure, especially when I think back to previous more volatile times following the financial crisis of 2008 and impacts of the oil price crash in 2015. The belief at our firm is that the UAE will be one of the last places on earth where the wheels come off if a global recession bites. We are still seeing a commitment to hiring by tech companies, but the general approach has changed.
Rather than looking at hyper growth, companies are focussing on efficient growth, with money safe and in the bank. Many companies will still thrive in this market, tech is still growing and the strong will grow stronger in this reset.