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Technology jobs on the chopping block as startups tighten belts

He said policymakers were keen to support the tech sector but will have to come up with a long-term blueprint to support further investment in R&D.

“The only option we really have [post-pandemic] is to expand tech exports,” he said.

Square Peg Capital partner Paul Bassat agreed the sector was facing painful short-term period, which would include redundancies.

“I think policy that both encourages more R&D spend, encourages more hiring and encourages people to develop skills that might be in high demand, those are the kind of policies we need.”

“It’s really important we bounce back hard from this,” he said.

Square Peg Capital partner Paul Bassat said it was important post-Covid startup policy focused on hiring and investment.

Square Peg Capital partner Paul Bassat said it was important post-Covid startup policy focused on hiring and investment. Credit:Wayne Taylor

Meanwhile, chief executive of lobby group StartupAus Alex McCauley said the true cost of job losses in the tech sector was not yet fully known.

The group’s annual Crossroads startup report suggests the sector creates 4,500 new Australian jobs each year, though these numbers are now under threat amid a hiring freeze.

“I think there has already been a huge hiring slowdown and there will continue to be, until there is a rebound,” Mr McCauley said.

He said while companies are looking to employee hours before laying them off, there were some technology sub-sectors highly vulnerable to job losses.

“If your product is tied to the success of your customers, you will feel the pain,” he said.

“There are a whole bunch of companies reliant on business customers and they are laying people off.”

The situation in Australia is part of a global trend, with a report from global research group Startup Genome last week showing three quarters of the more than 1,000 global companies surveyed had made staff redundant since the onset of the crisis. Across Asia and the Pacific, 60 per cent of businesses had fired staff.

Blackbird Ventures partner Niki Scevak said the true scale of job losses in the sector could not be predicted because businesses were still feeling “second and third order shocks” from the virus.

He said startups across the board were paring back planned hiring, though the focus on cost reductions could mean Australian businesses miss out on opportunities that will spring from the crisis.

“I think the world has gotten too sad — or has at least forgotten to look at the upside scenarios [after] this,” he said.

While some companies will have to make significant layoffs, other globally-focused software businesses will likely see significant growth on the other side, he said.

“We have to start thinking about how startups can capture these waves.”

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