A DAY & ZIMMERMANN COMPANY

Will the Yahoo 20 percent put the talent war on hold?

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Posted by Joel Capperella

November 11, 2010

So, naturally, the day after I wrote about the inevitable looming war for talent, 2,820 of these technically talented employees could be on the streets searching for a new home. According to TechCrunch, Yahoo is preparing to lay-off 20 percent of its staff.

So what does this mean? Yesterday's call to arms for a new wave of battling it out for talent was early? Not in my opinion. In fact, I would suggest that the Yahoo 20 percent is simply a casualty of the speed at which the social web is evolving, as this announcement comes on the heels of the disappearance of Ask.com as a search engine. There will almost certainly be more of this type of news to come.

But what about all these extra employees? Doesn't this drive the tech wage down in Silicon Valley? Will there be a negative wage trend trickling down through the ecosystem? Not necessarily. It could actually have just the opposite effect. Google's move locks up a good majority of their employees for at least the foreseeable future. Facebook is going to be hard-pressed to compete, not to mention all the existing secondary players that consume the same talent. Interestingly, the opportunity here could lie with the talent itself.

The result could be an increase in wages as available candidates become more selective with where they work, and many may choose to take a "free agent" route, offering up their services on a contract basis, either directly or through suppliers of talent. Certainly, the demand will be there and more firms are leveraging contract labor in this fashion.

Of course, we could be wrong on this one (OK, me really...I didn't run this by any of our other contributors...), but it will be interesting to watch it unfold.







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