Laid off tech workers are 'using severance checks as new seed capital for startups': Reporter
TechCrunch Senior Editor Natasha Mascarenhas joins Yahoo Finance Live to talk about how laid off tech workers are utilizing severance packages to fund their own startups.
Video Transcript
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- Two things have dominated tech news in 2023-- AI and also layoffs. According to layoffs.fyi, over 110,000 people have lost their jobs just in tech this year. With a closer look at what's happening and also the moves that some of these talented people are making, we want to bring in Natasha Mascarenhas, a TechCrunch senior editor.
Natasha, it's great to have you here. So certainly, it seems like day after day, we're getting these headlines of these tech companies forcing to make that tough decision, eliminating some positions from their companies. You've been tracking what some of these former employees are doing. What have you found?
NATASHA MASCARENHAS: Oh my gosh. It is so good not to be talking only about the doom and gloom when it comes to layoffs. What I'm happy to report is that some people are using those severance checks as new seed capital for startups.
So we're finally seeing employees from companies like Meta, like Stripe and Twitter start companies, whether it's a Twitter employee starting a Twitter rival or someone who recently got laid off from Better.com, that home mortgage startup that became pretty viral last year for going through rounds of layoffs, starting a company that's trying to disrupt the way lawyers work.
It's very interesting to see the expanse of people and how they're kind of trying to approach this problem.
- And so, Natasha, when they're able to find a new position or even put some of that severance check capital to work, it comes back to what wage they're eventually going to be able to take on as well and how that compares to what they may have previously been making. Have you heard anything on that front?
NATASHA MASCARENHAS: Listen, I think over 260,000 people over this year and last year have been laid off from their tech jobs. And I think it does take a very specific kind of person to be able to take the risk, as you point out, towards starting their own company.
So I will say it's still a tiny percent of people that can really financially afford to bet on themselves. I wrote a story a while ago that was looking at how the risk profile has changed so much so that some people are not starting their own companies, but they're taking two jobs at two different companies without either company knowing.
So I do think we're not necessarily seeing everyone be able to make that jump, but the fact that there are some new programs out there that are designed to give capital to laid off workers makes me feel more confident that that jump is going to be easier to make.
- All right. Natasha Mascarenhas, TechCrunch senior editor. Thanks so much for joining us. We appreciate it.
