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February 14, 2023

How Big Tech Layoffs Impact America's Backbone



Last year's layoffs at Meta, Twitter (News - Alert), Microsoft, and Alphabet total over 200,000. Jessica Vann, Founder and CEO of Maven Recruiting Group, says it's high time Americans rekindle their appreciation for the contribution small businesses make to the nation's overall economy.



"Big tech companies are laying off in the tens of thousands. As devastating as that may be for those impacted, it’s also not surprising. These employers over-hired as we emerged from the pandemic and for various reasons, whether its failed product launches or a need to slash costs to please shareholders and investors, we’re now seeing those companies contract.   Regardless of the reason, as before, small businesses will carry the brunt of the economy and pick up the slack left by big tech’s wake.  We are the unsung heroes of the American economy. ."

According to Vann, most people do not realize how critical small businesses are to the US economy. The truth is that small businesses with 500 or fewer employees represent 99.9% of the country's businesses and 99.7% of companies with paid employees. What's more, Forbes Business Council says small businesses can take credit for 62% of the jobs created between 1995 and 2020.

Large corporations have the luxury of cutting costs by outsourcing and offshoring operations. Meanwhile, the nation's small businesses continue to provide local opportunities. Unlike large tech employers, managers of small businesses feel accountable to their employees and make sacrifices.

"We don't subscribe to Wall Street's pressure to increase profits at any cost," Vann remarks. "That's because we can't gamble on risky ideas and then distance ourselves from the fallout. For us, the consequences of our business decisions are personal and real. When leaders make decisions without considering the people under them, they make a mockery of leadership."

During the 13 years Vann has led Maven Recruiting, she laid off staff only one time. Though the recent recession forced her hand, she still recalls that day with a sense of defeat.

"Like so many other small business employers during the pandemic, I assumed personal economic loss and rationed cash reserves to employ as many people as I could," she remembers. "I addressed each person I let go personally and with dignity. They didn't come to work to find their email suddenly turned off. The decisions were the most difficult I've ever made, but they enabled us to come back stronger and more productive."

Adding insult to injury, Vann says small business owners frequently find their staff poached by big tech when the economy is booming. Large corporations cannibalize small businesses by luring top talent with the incentives and salaries only they can offer.

"I've seen so many of my most talented employees gobbled up by the 'big guys,'" explains Vann. "We can't attract employees with the benefits packages, employee-funded IVF programs, and mega sign-on bonuses big tech has. We create talent with our time and resources, help them become superstars, then watch big corporations swoop in and carry them away."

The headlines hyper-focus on the struggles of big tech companies because it makes good drama. However, under all of that is an even bigger story that news outlets are missing altogether. 

While the giants rise and fall, small businesses in every city of every state unite to prop up the nation's economy. "We are the economy's backbone," says Vann. "We don't get tax incentives or hand-outs like the big guys. We don't get the favorable rates and insurance premiums afforded to businesses with mega purchasing power. You won't see us in the headlines, but we built this country. And we are not going anywhere."



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