While some of the biggest names in tech are freezing hirings, slowing them down or outright laying off part of their engineering teams, firms in Latin America are gearing up for a battle of open wallets in an attempt to catch laid off workers and solve their own staffing problems.
Though not as prevalent as in the US, tech firms and staffers have noticed an uptick in layoffs in Latin America. Reports coming from Colombia, Chile, Argentina and other countries from the region show that startups are having a particularly difficult time keeping their talent around as they attempt to grow under the pressure of drying investor funds.
The layoffs have –in theory– injected a healthy number of engineers into an ecosystem starved for tech talent. Nevertheless, the job market is still hot. Hotter, in some ways, actually. Companies know there are more workers available all of the sudden, and they are willing to pay extra to snatch them up before anyone else.
“Right now we can’t hire enough. I’m about to put out a bonus of US$5,000 for every senior engineer that we can hire, as a referral program,” said Brian Requarth, Co-Founder at startup accelerator Latitud. “We’re on the hunt, putting out bounties to find engineers.”
In spite of the layoffs, the talent shortage remains, explained Requarth. The demand for tech services is still high in the region, pushed by local businesses scaling operations.
To make matters worse, there’s a growing interest by US tech firms in launching Nearshore operations or hiring Latin American talent. With deeper pockets or offering a paycheck in US dollars, these companies become formidable competitors in the hunt for top software engineers, forcing regional firms to step up their game.
“There is a massive surge in US companies hiring in LATAM. I think that trend is only going to continue, because there’s really good talent. And less expensive,” said Requarth. “That’s gonna increase the cost for local companies.”
Nearshore firms are noticing too. Digital transformation giant Globant expects to increase its headcount in Chile alone by 500 employees in 2023, this as part of its plans for expansion in Latin America and beyond. Nevertheless, the company faces the prospect of an even tighter job market.
“There’s been an uptick in the intention of US startups to have Nearshore development centers to continue with their respective roadmaps with lower costs,” pointed out Gabriel Martínez, Technical Director at Globant.
“We’re on the hunt, putting out bounties to find engineers”— Brian Requarth, Co-Founder at Latitud
Headlines have been filled for the past couple months with reports of massive layoffs in response to rising inflation and labor costs, an exceptionally hawkish Fed and the fears of a sharp economic downturn in the US. From giants like Microsoft, Meta and Netflix, to smaller players like Robinhood, Oracle and even Only Fans, the pink slips have been flying all over the place, underscoring the cautious approach recently taken by US tech firms.
While the wave of layoffs continues, some of them are stepping up their hiring game. A CNBC survey showed that 55% of companies consulted see the wave of layoffs as a chance to acquire top talent. In order to attract them, though, they are taking a more aggressive approach to compensation, with equity taking a back-seat to cash.
Catching Them as They Fall
Nearshore firms are losing no time in their hunt for recently laid-off tech talent. Some of them are taking to social media sites such as LinkedIn to fish for prospects.
“If you’re an individual who has been hit by this wave, please get in touch […] If you’re a tech company that laid people off because of capital restrictions, also get in touch. Nearshoring IT staff has become an ideal way of continuing operations at a fraction of the cost,” posted Sergio Arboleda, Head of Sales at Cafeto Software, in his LinkedIn profile.
Diego Velázquez, IT Staffing Lead at Nearshore Technology, wrote a similar post in his LinkedIn profile in an attempt to make the best out of “the recent layoff announcement at Wizeline”.
The lengths to which tech firms –both Nearshore and US based– are going to attract talent underlines the fact that, in the tech job market, workers are still in the driver’s seat. Competition for their services grows more intense by the day, pushing wages upwards, especially for the top crop in high-demand disciplines, such as AI, cloud computing and cybersecurity.
For now, Latin American tech workers need not to worry, commented Brian Requarth, adding that some companies might want to work extra hard to keep software engineers from the region.
“LATAM engineers are probably more loyal than Silicon Valley engineers. It also helps to be building something where you are maybe a customer of the product, or you see it in your day to day business,” he said.
Others are lucky enough to have prospects knocking on their door. Nowports, one of Latin America’s most recent unicorns, hasn’t been affected by the talent crisis in the same way as other startups, according to the company’s CTO, Santiago García.
“We didn’t have a problem in this matter because of the impact that we’re having in the region and the culture we have at Nowports, specifically in our tech team. People want to be in our company,” said García. “We have been onboarding at least 10 people a week in our tech team for the last two months, more or less. We are already a 130-140 people team. We were 50 when we started this year. We expect to finish the year with 200 people.”
“People really want to join this project, what we are building. They are super open and motivated by what we are trying to do,” he added. “So far, we are not dealing with any difficulties like that. We have been able to hire even more people than we expected.”