After a decade of relentless hiring, tech layoffs across UK and global firms are rewriting the rules of the talent market. For founders and hiring managers in startups and scaleups, the power dynamic has shifted: there is suddenly more choice, more experience on the market and a very different conversation around pay, equity and flexibility.
What is driving the latest wave of tech layoffs?
The headlines focus on big household names cutting staff, but the reasons are more structural than sensational. Several trends are colliding at once: over-hiring during the low interest rate boom, pressure from investors to prioritise profitability, and a reset in post-pandemic demand for digital products. Many companies built teams for hypergrowth that never quite materialised, and are now trimming back to more sustainable levels.
In the UK, this is amplified by cautious consumer spending and rising operating costs. Larger tech firms and global players with London hubs are pulling back on speculative projects, middle management layers and non-core product lines. The result is a steady stream of experienced engineers, product leaders and operations specialists entering the market, often for the first time in years.
Which skills are suddenly more available after tech layoffs?
For years, early-stage founders complained they could not compete with big tech on senior technical talent. That imbalance is easing. The most noticeable influx is in three areas: senior software engineering, product management and data roles.
On the engineering side, there is a glut of mid to senior level developers with experience in modern stacks: TypeScript, React, Node, Python, cloud-native architectures and distributed systems. Many have worked on large-scale platforms and bring strong opinions on observability, testing and deployment automation.
Product management talent is also more accessible. Candidates who have led cross-functional teams, owned significant revenue lines or shipped complex features at scale are now open to joining smaller companies where they can have more visible impact. Data specialists – from analytics engineers to machine learning practitioners – are looking for roles where they are closer to decisions rather than simply operating a dashboard factory.
There is also a quieter but important pool of experienced people in technical operations, security, compliance and developer tooling. For UK startups that previously deferred these hires, the chance to bring in seasoned operators earlier in the journey is suddenly realistic.
How compensation expectations are shifting
One of the biggest knock-on effects of widespread tech layoffs is a reset in pay expectations. During the hiring frenzy, it was common to see salary inflation and aggressive counter-offers. That has cooled. Candidates are more pragmatic about cash, and more interested in stability, mission and clear progression.
Base salaries at the very top end have stopped climbing so fast, particularly for non-specialist roles. Instead, candidates are asking sharper questions about runway, profitability and funding history. Many are prepared to trade a small reduction in cash for meaningful equity and a credible path to value creation.
Remote and hybrid arrangements are now seen as standard rather than a premium perk. Some candidates are willing to accept slightly lower London-level salaries in exchange for true flexibility, especially if they can live outside major hubs. Startups that can offer sane working hours, transparent communication and a low-politics culture often win over candidates who are tired of the chaos that preceded their redundancy.
What UK founders should do differently in this market
For founders, this is one of the most favourable talent markets in years, but it still rewards focus and preparation. The first step is to get brutally clear on the next 12 to 18 months of product and revenue goals. That clarity should drive a small number of high-leverage hires rather than opportunistic collecting of impressive CVs.
Second, tighten your hiring story. Candidates emerging from tech layoffs are wary of joining another company that might restructure on a whim. Be ready to explain your burn rate, runway, customer base and the specific problems a new hire will own. Transparency about risk can actually build trust if you pair it with a credible plan.
Tech layoffs FAQs
Why are there so many tech layoffs right now?
Many tech companies hired aggressively during the low interest rate and pandemic boom years, assuming demand would keep rising. As growth slowed and investors pushed for profitability, firms began cutting projects and teams that were not core to revenue. Rising costs in the UK and a more cautious funding environment have accelerated this shift, leading to broader restructuring across the sector.
Are tech layoffs good or bad news for UK startups?
In the short term, tech layoffs are uncomfortable for those directly affected, but they do create opportunities for UK startups. There is now a deeper pool of experienced engineers, product leaders and data specialists who were previously locked into large organisations. For founders who can offer clear missions, sensible working cultures and a transparent plan, it is easier to hire strong people than it has been for years.
How should a startup adjust its hiring strategy after tech layoffs?
Startups should become more deliberate rather than more aggressive. Focus on a few pivotal roles that directly move key metrics, and be transparent about runway and risk. Offer a balanced package of fair cash, meaningful equity and genuine flexibility. Strengthen your interview process so it respects candidates’ time and expertise, and be ready to show how their experience from larger firms will translate into impact in a smaller, faster-moving environment.