Tens of thousands of job cuts have rocked the industry, but unemployment among tech workers remains low—and plenty of companies are desperate for talent.
ELON MUSK’S DECISION to fire half of Twitter’s employees rocked the tech industry last week. And the problematic platform is not the only shorthand for the well-known company. Salesforce and Meta have lost 11,000 jobs this week, or 13 percent of their workforce. Snap, Lyft and payment company Stripe also recently cut their payrolls, laying off about 3,000 employees in total.
More than 118,000 people have lost their tech jobs this year, according to Layoffs.fyi, which tracks public reports of job cuts in the industry. At the same time, companies like Amazon and Apple have slowed or froze hiring, reducing the number of high-tech job openings that can suddenly put people out of work. However, while many individual workers must now find new jobs, the broader outlook for tech workers remains strong. Their skills are still in demand, and their colleagues have responded to the recent layoffs with a wave of massive support to help laid-off workers find new jobs.
Despite dominating the headlines, big tech companies are just one niche in the broader tech industry. Many smaller companies and companies in related industries are still hiring tech workers, albeit at lower rates than the tech giants of late, and perhaps for lower wages. Some companies are now taking the opportunity to bring in people who were previously monopolized by recruiters from larger companies.
“These workers have a huge advantage,” says Julia Pollak, chief economist at ZipRecruiter. “Demand for technicians continues to be strong across industries ranging from government to retail to agriculture. These industries have been left in the dust in recent years.”
The forced exit from Big Tech also opens up new opportunities for startups and investors looking to build the next big thing. “For everyone affected by the layoffs at Meta: Monomi Park is hiring,” Nick Popovich, CEO of the independent game studio, tweeted this week. Day One Ventures, a venture capital firm, has responded to the downsizing of large tech companies by launching an initiative aimed at laid-off workers, offering $100,000 to invest in 20 different start-up ideas. PitchBook, which tracks startup data, recently estimated that around $290 billion could be invested by venture capitalists, assuming sufficient funding is available for new entrepreneurs.
“You have two diverging paths for technical workers,” says Pollak. “One group is taking a ‘flight to safety’ approach and is targeting recession-resistant businesses and industries. And the other group will throw caution to the wind, take big risks and create their own companies.”
Overall, the job market for technicians remains strong. In August, the U.S. high-tech unemployment rate was 2.3%, according to the Information Technology Industry Association, well below the U.S. unemployment rate of 3.7% in the same month, itself a historically low figure. standards. There are about 8.7 million tech workers in the US, according to data released by CompTIA earlier this year.
At least some of the recent layoffs are less a symptom of a major upheaval in the economy than a reaction to over-hiring by tech companies during the unexpected boom they experienced during the Covid-19 pandemic. “We were overly optimistic about the short-term growth of the internet economy in 2022 and 2023,” Patrick Collison, Stripe’s chief executive, said in a memo to employees about the company’s layoffs. Mark Zuckerberg cited his own misunderstanding of the rise of the internet pandemic in his memo to employees about job cuts at Meta. “Many predicted that this would be a permanent acceleration that would continue even after the end of the pandemic,” he wrote. “I was wrong and I take responsibility for it.”
The suspension of hiring at companies like Amazon, Apple and Alphabet could also be seen as a sign of sober moderation rather than a major crisis, says Rucha Vancoudre, senior economist at analytics firm Lightcast. “Everyone is looking to the future, seeing prices going up and trying to cut costs,” says Vancoudre. Companies, he says, are “trying to be more balanced.”
The overall picture may not be as encouraging for people who have been laid off and are now trying to quickly find new jobs or risk losing their work visas. But tech workers have a tradition of teaming up to help other tech people after layoffs.
“There is a common identity for the tech worker,” says Natalia Nedzhvetskaya, a UC Berkeley graduate student studying sociology and employee activism and a participant in Collective Action in Technology, a volunteer project that brings together tech workers. “There is precedent in this industry for information sharing [and] a culture that values transparency.”
Tech workers trying to mitigate the effects of the layoffs have set up groups on LinkedIn for employees recently laid off by Meta. They launched and distributed a Google sheet with potential opportunities. And they’re promoting each other’s posts on LinkedIn and other social platforms to grow their audience and get the attention of the managers they hire, rather than cut staff.
There is also some institutional support. Coda, an online documents startup, hosts lists of company alumni that laid-off workers can add their details to. Collective Action in Tech has tweeted out a layoffs guide that includes tips to help workers understand their rights and ways to communicate safely, such as using Signal.
This wave of support is helping some tech workers keep their cool, even as layoff headlines pile up. “There is a lot of uncertainty and people understand that there will be a lot of hesitation,” Nedzhvetskaya says. Yet while people are understandably worried about job losses, he says, he doesn’t see a “full blown panic.”
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