Will tech boom again?

Hi friends 👋,

Happy Wednesday and welcome to the 9th edition of Weekly Olio.

500+ souls subscribed to this newsletter since the last issue, welcome to the community folks. 🤝

To all our current and new subscribers, many thanks for all your support and feedback so far, we hope it continues the same in the coming days and weeks. 😊

Before we proceed, a lot of our readers asked for additional reading material behind the infographics. So, from now on, we will be putting necessary links within the infographic section as well.

For the tweet/ infographic, click on the image to access the original content.

For articles, there is no change, either click the title of the article or the embedded image to access the original short/ long read.

Now, back to business. 🤠

In addition to the curated content, today’s Publisher’s Parmesan covers the factors behind the recent layoffs as well as some of their consequences. The real hit is yet to be seen, thanks to the ongoing uncertainties as well as the generous packages given by the tech majors in the past.

Let’s get to it.

The Quote󠀢 💭

The Tweet 🐦

While the FTX saga has moved out of the news cycle, it continues to play out in US courts. The above tweet is the most comprehensive thread documenting the story from start to finish. Must read especially if you are new to this.

Simply click on the tweet to access the thread. 🤡

The Infographic 💹

Traditionally, bull markets in Indian equities have been led by increased inflows from global financial investors. But the last year saw something unique - while foreign investors retreated from Indian markets, domestic investors picked up the slack and as a result, Indian equity markets outperformed global peers.

Want to read more on this? Simply click the graphic below to access the reading material. 🤡

The above graphic shows the shift in fund inflows from foreign investors to domestic investors. Are the Indian capital markets really decoupling from global markets to chart their own path? What do you think? Let us know in the comments below.

The Short Read 📝

Neuralink Demo Day - by Stonks

Neuralink is a neurotechnology company that aims to develop implantable brain-machine interfaces (BMIs) to improve human cognitive and sensory abilities. The company was founded by Elon Musk, the CEO of SpaceX and Tesla, and a group of neuroscientists and engineers.

How much more we can learn about the brain if Neuralink is able to scale? If hundreds, thousands, or even millions of people are hooked up to these devices, there will be unprecedented access to brain data that would exponentially advance our understanding of human consciousness.

Wondering where to click to read more on this? 😛 Scroll up and click on the title of the article and you will be redirected to the original piece. Or simply click the image above this text. Yes, the one with Musk and brain and shizz. 🤡

The Long Read 📜

The dirty road to clean energy: how China’s electric vehicle boom is ravaging the environment - by Rest of World

In neighbouring Indonesia, nickel extraction is causing environmental and social devastation.

What is happening in Indonesia is part of a recurring global pattern in countries where battery materials are abundant. Local residents in Chile, Argentina, Congo, and elsewhere complain of environmental destruction, and dangerous or exploitative working conditions.

China’s dominance is a double-edged sword. On one side, it gives a boost to the local state’s income and local economic growth, but on the other, it could mean that the host country becomes a pawn in China’s larger industrialization agenda.

Wondering again about the article link? 😛 You know the drill. 🤡

Publisher’s Parmesan 🧀

Will tech boom again?

Layoffs in the tech sector are all over the news. Shopee has executed a few rounds of cuts, affecting as many as 7,000 employees globally. Then there are other large-scale re-org i.e., Meta (formerly Facebook) and Amazon, both cutting 10,000+ jobs.

There could be more if current macro uncertainties of inflation and rising interest rates persist. But how would these layoffs affect tech businesses and talent?

Varied impact of tech layoffs

The companies announcing the layoffs are not all of the same breed.

First, there are the US tech majors. – the likes of Alphabet and Meta – who are facing headwinds but still hugely profitable.

Next, there are the local and regional tech champions – Sea Group and GoTo – that are working hard towards profitability.

Also in the mix are myriad growth companies, that have benefited from low-cost funding in the last decade but now running out of cheap fuel for growth.

Last but not least, there are earlier-stage start-ups that are dealing with their own struggles.

The leadership, organisation and workforce across these organizations are all different. Hence when we assess the layoffs, the people impacted and the extent of impact can all be very different.

Tech companies are not as efficient as you think

The whole value proposition of tech is to make or run things more efficiently, through software, algorithms, and consumer products.

But that has not always been the case.

For instance, big tech companies used to deploy a “blocker strategy” where they pay above market rate and hand out multiple benefits to hoard talent from competitors.

Another practice was to throw more people at a problem instead of solving the fundamental issue. This was the case when Shopee was rushing for growth, when what could be done by one product manager was being handled by more than five people.

Furthermore, there has been discussion that the GMV per employee (an indicator of efficiency) at global e-commerce companies is much lower compared to their counterparts in China. This is common for many start-ups in the growth phase.

Finally, a bugbear for many tech companies is “involution”, a term made popular in China. Often in tech companies, people may be working hard but the effort does not translate into tangible value.

In the past few years, Tech companies have been able to ring in large profits or tap into cheap capital from the market. While some foresaw this year might not see the same growth as the last, few anticipated the dip to be so significant and destabilising. These companies are doing a lot more soul-searching now that investors are scrutinising their expenses.

Where will tech talent go now?

Across the industry, there is a sense that the real impact of the layoffs is yet to be seen, although many of those retrenched received a decent severance package.

Other companies, tech and non-tech, are already trying to tap into the talent coming out of these layoffs. We’ve seen TikTok’s parent company ByteDance take in former Shopee staff, while Singapore banks are amping up recruitment for tech-related roles.

But, the cooling of the tech sector means employees and companies aren’t feeling much FOMO (fear of missing out).

We are seeing that people affected by layoffs are not rushing to take up their next job role yet. Some are taking time to figure out what motivates them, and where they want to take their careers. Even those who have been spared from layoffs are considering their longer-term options.

As there is less pressure to fight for talent, companies now have more mental space to plan their transformation – instead of rushing for the next big thing just because others are doing it. They can assess what kind of talent would best suit their ambition, but more importantly their core culture and vision.

Tech will boom again

Ultimately, some tech companies will become more agile and adapt faster to a more volatile environment. They will create pressure for their peers, pushing innovation and productivity across the value chain.

This process will naturally see failures too – be it a company going under, a start-up not taking off, or a deserving individual losing his or her job. But the fact that CEOs and employees are reflecting on their choices now is good for the whole ecosystem.

Tech will boom again but in a different form. Will it be Web3, where blockchain technologies rule the Internet? Virtual reality and the metaverse? Artificial intelligence? Or SaaS, software licensed to businesses on a subscription model?

Nobody is sure, just like nobody quite predicted the mobile internet proliferation after the Great Financial Crisis.

The question is, when the next boom happens, are employers and workers prepared to seize it?

Entrepreneurs, executives and capital allocators will need a lot of hard thinking in that aspect, so that a good crisis is not wasted.

What’s your take on the recent layoffs and the way ahead?

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Peeyush and Mohit

Disclaimer: The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group or individual.