What the hiring paradox really means
Tech layoffs make one assumption feel obvious: if more engineers are available, hiring should become easier. And at the top of the funnel, it often does. Application numbers rise quickly.
Yet many organisations still struggle to hire. Shortlists remain thin, hiring cycles stretch, and offers are harder to close. The reason is straightforward: layoffs change availability, but they don’t change how tech talent is distributed, how skill demand is evolving, or how candidates evaluate employers.
Why the hiring paradox keeps showing up
After layoffs, the first thing that changes is visibility. More engineers appear on the market, and many roles receive more applications than they did a year ago.
What does not change is how segmented tech hiring is. The best candidates are still unevenly distributed across locations, skill profiles, and employer preferences. So even with higher application volume, many organisations still struggle to hire the people they actually need.
This is the hiring paradox: layoffs increase talent availability, but hey don’t automatically increase access to the right tech talent.
Layoffs increase availability, but not access
In practice, hiring difficulty is rarely about “Are there engineers?” It is about “Can we attract the engineers we need for this work, in this market, on terms they will accept?”
That question becomes sharper in periods of uncertainty, because both candidates and employers become more selective.
Available doesn’t mean interested
In high-option markets, where experienced engineers can compare multiple credible employers, candidates tend to screen faster and more strictly. They look for roles that signal strong engineering practice, clear ownership, and a credible path for growth.
This is why a company can receive plenty of applications and still struggle to close hires. Many candidates are technically capable, but not persuaded by the environment, the role scope, the work model, or the career value relative to other options.
“More applicants” doesn’t mean “more true matches”
Layoffs increase applications, but they also change how people apply. In uncertain periods, candidates often widen their search. This creates volume, but it also increases the share of near-matches, capable engineers, whose recent experience doesn’t fit the role’s real demands.
Fit is often narrower than the job title suggests. A “backend engineer” role might actually require operational ownership, regulated delivery discipline, or deep experience with a specific platform. When that is the reality, hundreds of applications can still produce only a small number of hireable matches.
Layoffs don’t solve the underlying skills problem
The paradox is happening inside a broader shift: skill requirements are changing quickly, and many employers are trying to catch up at the same time.
The World Economic Forum’s Future of Jobs Report 2025 describes skill gaps as the biggest barrier to business transformation, with 63% of employers identifying them as a major barrier for 2025–2030, and 85% planning to prioritise upskilling.
This matters because it clarifies what layoffs do not change. Even if more engineers are available, organisations are still competing for particular combinations of skills, operating maturity, and domain experience. The challenge is not only headcount. It is capability alignment.
Why strategic tech hubs become a logical response
In some markets, the number of high-growth product teams and FAANG-type ecosystems is dense. Even strong non-tech companies can struggle to be a first-choice employer locally, especially if their roles signal slower cycles, heavier constraints, or less visible progression.
In others, the talent is strong but the local set of comparable opportunities can be smaller. In that places, the talent base can be very strong while the local concentration of globally recognized tech brands may be smaller or even nonexistent. That changes what a compelling offer looks like. For many engineers in these markets, joining a Dutch retailer, Danish bank, or Swedish SME can mean meaningful ownership, stable long-term work, exposure to large-scale systems, and clear professional progression. In other words, the same employer proposition can be more competitive, and hiring becomes easier.
Conclusion
Layoffs can change candidate volume, but they do not change the deeper mechanics of hiring. Tech talent remains unevenly distributed. Skills continue to shift. High-option markets remain competitive.
Building capability where the organisation can reliably attract and retain strong teams is one practical response to these realities. INSCALE’s tech hubs allow you to build long-term capability in locations where talent is strong and your employer proposition is more competitive.
