*By Rafael Cichini
In recent years, the market has become accustomed to the abundance in the technology area. We went through moments in which companies in the sector, startups and technology areas of medium and large companies expanded their structures, in a flow that seemed to have no end, with many hiring developers, for example. However, like everything in life, changes occur. Everything changed, and quickly. In the same way that the pandemic accelerated this hiring movement, like pressing the WhatsApp audio speed button, we have the beginning of a slowdown to follow the economy's movements.
Global and Brazilian political and economic uncertainties, in addition to the toll left by the pandemic, added to a war scenario, it changed the environment we had. Investment funds started looking only for sustainable businesses instead of making countless very risky bets. As credit in the general financing market became expensive, investors began to prefer low-risk businesses that are good alternatives, especially in times of high interest rates.
This entire panorama made the logic, which previously aimed at growth, bring the central focus back to profitability. It seems strange to say it like that, but that's what actually happened. Companies pumped the brakes on increasing size to turn their attention to performance and profitability. As a result, many actions became necessary and one of them involves the much talked about layoffs.
You layoffs These are team reduction actions, with employees laid off to reduce costs or reorganize the company's structure. In technology organizations, layoffs are generally justified as necessary to improve business focus and efficiency. Although they can have a devastating impact on affected employees, companies generally benefit from reduced costs and the ability to focus resources on projects that generate more financial return.
That's why we've been following large technology companies reducing their sizes, laying off people or freezing vacancies. This scenario has been quite common, but despite seeming completely negative, it has an important side for organizations. In many cases, it means immediate survival or adjusting strategy for long-term growth.
These restructurings provide important lessons for companies, including showing the need to have more criteria for innovation and technology initiatives to focus on, now having two clear drivers: increased revenue or reduced costs to preserve margins.
Most of the cuts are related to long-term projects, initiatives that still have uncertainty about the results that can be generated. They also occur in adjacent areas, not related to the company's main activity. In the boom years, organizations started hiring technology teams internally. We heard a lot about how they had become 'technology' companies. Now, many are already announcing changes in their strategies to focus on their core business. With this, they stop being 'technology companies' and turn their attention to their businesses.
This change in the market brings the need to make teams scalable and to adopt technologies that make it possible to monitor the flow of business, such as Cloud environments and SaaS (Software as a Service) solutions that can be paid according to the volume of use. The next trend should be internal model tuning Squads as a Service, that is, it increases and decreases technical teams and projects according to development initiatives.
It is worth saying that this format is not necessarily something new. In the past, this concept worked for a long time, but in a model in which technology consultancies basically delivered people, without providing knowledge. They acted as low-value-added suppliers, instead of being true business partners.
Now, organizations demand support and commitment to deliveries, as well as engagement from suppliers with their business objectives. Furthermore, they need to retain knowledge to be able to generate value and promote digital transformation. Therefore, it is essential to have a partner capable of supporting business growth and scaling technology teams, without losing skills and technological culture. It is necessary to retain knowledge and be lean in the right way.
In short, the five premises for success are:
1 – Be truly agile. Remember that agility is related to focus, prioritization, delivering greater value with less effort, a lot of collaboration and visibility;
2 – Having truly digital partners, capable of effectively helping the company grow and reduce its costs squads according to demand. Furthermore, they must be able to retain knowledge during this process;
3 – Look at data strategically and always in search of insight for decision making, including to support the prioritization of what should or should not be done;
4 – Use automation and Artificial Intelligence to reduce costs in repetitive and purely operational initiatives, directing people to increasingly strategic activities;
5 – Connect each and every initiative in your value chain to the end, that is, ensure the measurement of all technology activities to understand whether they are contributing to increased revenue, reduced costs or greater operational efficiency.
Changes, with layoffs occurring daily, they bring challenges, but adaptation to new scenarios needs to be quick to help companies reach another level in the market. We are at a good time to reevaluate, realign strategies, analyze real needs and promote innovation with the adoption of new technologies with Artificial Intelligence. New habits, learning and reinvention are points that layoffs will help us adopt. Technology professionals will always have space to act, whether as a client or partner, in squads, as there is no doubt that Brazil is a nation with countless opportunities for digitalization. There will be no shortage of initiatives for technology professionals and companies, but now is the time to find balance for the entire ecosystem and define the path that will take us towards evolution.
*Rafael Cichini, Chief Marketing Officer (CMO) and Business Director at SQUADRA
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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