Henry Kirk had the long-term goal of starting his own company after retiring as an engineering manager at Google. However, as the tech giant hit the headlines for downsizing some 12000 jobs in 2023 beginning, Henry Kirk has now decided to give top priority to his once ‘long term goal’, as his name got included in the list of fired employees.
Henry Kirk and five other former Google employees are now working on launching their own software design and development studio. He has already announced his new venture in a LinkedIn post that went viral and garnered more than 15,000 reactions. Henry Kirk informed about receiving around 1,000 messages from people looking to work with his agency, apart from applauding his attempt to conjure opportunity from a setback.
The team has given themselves a deadline of March 2023 to finalize the business idea and the roadmap to implement it together.
“My back is against the wall because I have to get back on my feet,” Henry Kirk said.
However, he sounded energized about the new challenge as he remarked, “I actually am embracing the fact that this happened.”
By 2022 end, as the bubble burst phenomenon of the tech sector took a precarious shape and as per Layoffs.fyi, a website that tracks job losses in the industry, businesses laid off some 160,000 workers by the year-end.
As of February 2023, over 100,000 additional people have lost their jobs as well and the number is still going up. Twitter, Ola, Uber, Meta, Google, Microsoft, name any big company, you will be hearing the dreaded news about staff downsizing.
The same sector, whose professionals used to be subjects of envy, due to their high salaries and lavish job perks, are now spending their days in anxiety.
There are others like Henry Kirk, who are using their healthy severance packages to work up their own ideas, their passion projects.
“I just kind of felt this weird sense of relief,” said Jen Zhu, another laid-off techie. The professional is currently working on a health tech start-up called Maida AI, which automates healthcare administration tasks. Zhu lost her job in 2022 when the virtual care company Carbon Health let go of 250 workers. She took a chief of staff job at another company, but decided to follow an instinct and develop her own business idea, which came to her mind after coming across problems in the healthcare industry.
“It’s a grind. It’s really hard to turn off. There’s always more to do. You’re just so acutely tied to the outcomes and your company moving forward,” she said even as her start-up is among seven that got USD 100,000 in funding from Day One Ventures.
“The golden handcuffs are off, and I can do whatever I want now,” she remarked.
Start-up accelerator Y Combinator has seen applications increase by 20% in 2022, getting a total of more than 38,000, said company spokesperson Lindsay Amos. The number of applications filed in January 2023 has also increased fivefold.
Venture capital firms are also ready to pump massive money into these new ventures after years of low-interest rates that inspired investors to search harder for returns. However, scandals of unicorns have caused investors to investigate start-ups before putting their money there.
Market uncertainty is adding more fuel to the scenario.
“They’re being a lot more strategic and a lot more careful. It’s a lot more about market possibility and vision and also execution. One of the biggest things I’m seeing is you can’t raise capital on a slide deck anymore,” said Julia Austin, a senior lecturer at Harvard Business School, angel investor, and founder of ‘Good For Her’, a non-profit community for female business founders.
Also, start-up valuations have fallen in 2023. As interest rates are rising after every Federal Reserve meeting and tech stocks languish, venture capitalists are now holding tighter to their funds. Seed stage funding slumped 35% for start-ups by late 2022, Crunchbase data shows.
Despite these widespread layoffs, the US economy still remains in good shape, as per the latest government job data. Also, history suggests recessions giving rise to start-ups. Google launched in 1998, just before the dotcom crash; Airbnb started in 2007, followed by Slack, WhatsApp, and Square in 2009 (from 2007-09, the world witnessed The Great Recession).