As a result of Big Tech's latest slew of layoffs, startups in numerous fields have begun to blossom.
Twitter, Meta, Microsoft, and Snap let go of more than 150,000 employees combined in the latter half of 2022, causing a huge shake-up in the job market. Economists were concerned that these massive cuts were a sign of an impending recession and a signal that Big Tech wasn't doing as well as many had hoped.
Reuters notes that this slashing of employees is comparable to the dotcom bubble bursting in the early 2000s — but then as now, as bigger, overvalued companies petered out, new companies rose from their ashes to take up more space in the market. As a result, there is a silver lining to these firings. According to Reuters, venture capitalists say that many young entrepreneurs are taking their talents from large tech firms to startups.
One company based out of San Francisco has tried to make the best of this troubling situation by catering to founders who were recently laid off from tech roles. Named Day One Ventures, they plan to invest $2 million in 20 local companies founded by those fired in the past year who have used the opportunity to create something new.
Xoogler, founded by a Google worker who was fired after ten years in the company’s employ, is another company formed specifically to help former Google employees who aspire to become founders.
Day One Ventures, along with U.S. Venture Partners and Speedinvest, have noticed several trends appearing among new startups. Gaming and artificial intelligence are popular areas for founders, and e-commerce has also been trending.
"In every period of economic uncertainty, there is opportunity — to reset, re-prioritize, and re-focus energy and resources," Sofia Dolfe, a Partner at Index Ventures, told Reuters. "With advances in game design, new innovations like cloud gaming, and the emergence of social networking in this sphere, gaming has really transcended into mainstream culture."