Software platform Paraform, which finds work for laid-off tech employees, raises $2m

As tech firms like Atlassian, Amazon and Mr Yum shed staff, this start-up says its platform can help affected employees quickly find new employment.

Paraform co-founders Jeffrey Li and John Kim.

As lay-offs tear through the local tech sector at an increasing clip, Australian-born recruitment software start-up Paraform has raised $2m to expand across Australia and the US in a bid to help laid-off workers quickly find new employment.

Paraform chief executive and co-founder John Kim told The Australian that with Australia’s unemployment rate sitting at just 3.7 per cent, and the labour market experiencing the tightest conditions in half a century, the tech market had been disproportionately impacted by lay-offs.

Mr Yum last week announced it was shedding another 40 staff after last year axing 17 per cent of its workforce, while Atlassian announced it would axe 500 roles. Tech giant Amazon, meanwhile, is laying off 9000 workers globally.

Statistics from lay-off tracker Layoffs.fyi show that some 153,000 tech workers from 530 tech companies have been laid off in the year to date.

“With the Australian market starting to experience eerily reminiscent turbulence, our experience leads us to believe that the trends will continue to gather steam throughout this year,” Mr Kim said.

“As lay-offs become part of the new normal, and as businesses continue to refocus their models in line with the broader macro trends, the Australian workforce will be on the lookout for strong incentives to keep their skills within the local market.

“Never has this been more critical than with the recent subsequent wave of lay-offs at the likes of Mr Yum, Amazon and Atlassian. These tech leaders are living proof that if displacement is imminent, a plan B is paramount to ensure recruiters and HR professionals also retain an income.”

Mr Kim said with top tech talent now open for opportunities, securing the best candidate for a job would rely more heavily on personal connections and industry expertise.

He founded Paraform last year with co-founder Jeffrey Li when they began seeing the repercussions of lay-offs rattling the tech industry in the US.

Paraform’s marketplace format lets tech companies post bounties for open roles, and anyone – professional recruiter or otherwise – can collect it by successfully referring a candidate.

The company has now raised $2m in a funding round led by US venture capital outfit Primer Sazze Partners, with additional support from co-founders of video streaming giant Twitch along with Scale AI, and Founders, Inc. It did not disclose its current valuation.

Mr Yum chief executive Kim Teo. Picture: David Crosling

“Our goal is to make freelance recruiting as easy as possible … Given professional recruiters have a choice, we believe they’ll choose us over in-house or agency models. It’s the classic question of being an employee versus running your own business,” he said.

“That’s why we’re ramping up our footprint in Australia to ensure that those employees impacted by lay-offs in the tech sector have a safety net to fall on.”

Kevin Lin is a co-founder of video streaming platform Twitch, now owned by Amazon which acquired it for $US970m in 2014.

“When you look at the greater impact of these tech lay-offs, an entire industry of people are at a loss. John and Jeff stumbled upon a need and developed a solution to help provide jobs and shake up a traditional industry,” Mr Lin said.

“We believe in the power of the Paraform marketplace and the network it’s creating, and are proud to back the company and its positive impact on recruiters and companies alike.”

Mr Kim said that tech workers with extensive connections often make great recruiters, and now have an opportunity to make money for their efforts.

“Truly anybody can be a recruiter … By putting an ex-colleague or friend in contact with a business that’s calling out for tech professionals, not only are you supporting that individual to get back into work, but you’re also helping the Australian economy keep hold of its most critical commodity – local talent,” he said.