Kaseya CEO Fred Voccola shares his tech company’s success, labor costs, and AI developments on The Big Money Show.
Despite massive layoffs in the tech industry over the past year, one CEO is in hiring mode.
Fred Voccola, the CEO of Miami-based software company Kaseya, discussed why the industry is struggling and how his company is avoiding pink slips on Tuesday’s The Big Money Show.
“What we’re finding in the tech sector is that a lot of tech companies are overwhelmed. And the main reason for that is their customers,” Voccola told Brian Brenberg of FOX Business.
“Most buyers of technology, if you think of LinkedIn, Microsoft or Facebook, most of their customers are large corporations. And these companies have spent the last 15 years either digitally transforming or investing huge amounts of money to make them digital-first companies. We are now, so to speak, at the end of this phase. So tech companies haven’t properly adjusted their OpEx or spend to reflect that. So you see a slowdown in spending “They overcharged their customers and they realized they are overcharged. So they trim pretty aggressively,” he explained.
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Mass layoffs at companies like Amazon, Meta, Salesforce and most recently LinkedIn rocked the tech sector over the past year, leaving thousands without jobs.
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Voccola believes part of the problem is labor costs. According to the Employment Cost Index (ECI), labor costs in the US increased by 1.2% in the first quarter of 2023 and by 4.8% year-on-year from March 2022 to March 2023.
“For the past nine months, they’ve been doing that [labor costs] is still increasing. I think they will increase in the next year or two. “The labor costs are quite high,” he said.
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However, certain regions of the United States, including South Florida, where his company is headquartered, are not seeing rapid increases in labor costs, Voccola noted.
“Depending on where people are geographically, the rate of increase is slower. In Silicon Valley, for example, the rate of increase is astronomical. We are a Miami based company so we have slightly cheaper labor rates. But wages are still rising.
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Voccola went on to explain that he relocated the company from California to “very business-friendly” Miami, where it has expanded, doing business in more than 10 countries.
“They have a really motivated workforce and a very cost-effective workforce and a great business location,” he said.
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While the pandemic changed office dynamics, the CEO said he has retained a workplace in the office.
“It creates a culture of goal achievement,” Voccola said. “A common goal when you’re with your coworkers every day: instead of staring at a zoom in your living room and doing your laundry between meetings, you can focus more on the task at hand.”