Laid off tech workers will likely find new jobs but tensions growing in sector and among workforce.
Recent layoffs by major tech companies have dominated recent industry reports. But the numbers can cloud longer-term job trends. Overall tech work is still growing and spreading through the economy, although workplace tensions and conflict in the tech sector also may be growing.
First, the numbers. Bobby Allyn at NPR reports the tech “industry is confronting one of its worst contractions in history.” Google, Amazon, Microsoft, and Meta have “eliminated 51,000 jobs in recent weeks” as business slows and the companies fear Federal Reserve interest rate hikes will cause a recession.
The clumsy and often brutal way tech workers get fired dramatizes many stories. A Wired report says Google workers found they were fired when “the light on the card reader outside their office flashed red, rather than green.” Twitter workers had their passwords “changed remotely” and their company computers locked with a blank screen. Others, with little or no warning, were unable to log into their phones, computers, and accounts.
But the drama and large layoffs at some firms obscure the continuing upward trend of tech employment, both in the sector and increasingly across the economy. And the layoffs come after a time of very rapid job growth in tech.
Yahoo Finance’s Daniel Howley compared recent Big Tech layoff announcements to their growth during the pandemic. Google has announced 12,000 layoffs, but they had added 67,880 jobs during the pandemic. Microsoft has so far announced 10,000 layoffs, compared to a pandemic job growth of 77,000. And Amazon’s 18,000 layoffs need to be seen against their previous job growth of 746,000.
So even though it’s jarring for tech workers to be laid off (many for the first time) and in such mean-spirited and thoughtless ways, the layoffs aren’t a sign of impending economic disaster.
Many of these Big Tech firms have been on continuous growth paths for years and their stock prices sometimes seem to transfix journalists and investors. So the layoffs are generating an inordinate amount of media attention, even though the tech sector on its own is only around 3% of US jobs.
Tech workers are relatively advantaged in the labor market. They are better educated than most workers, with skills that are still in high demand. A ZipRecruiter survey last year found that “among people who were recently laid off and worked in tech previously, 37% found a new job within one month, and 79% found a new job within three months.”
And jobs are still out there. Executive search specialist Atta Tarki writes in the Harvard Business Review(HBR) that “it’s still a workers’ labor market,” viewing layoffs as “currently abnormally low compared to historical standards.” He sees “American businesses” in a “struggle” to hire adequate staff “for months to come.”
Part of the tech worker advantage lies with the spread of tech jobs beyond firms in the tech sector. Another HBR article sees the tech layoffs as “an incredible opportunity” for non-tech firms to hire skilled specialists. The authors agree there was significant pandemic “overhiring” in tech, and the layoffs show the major firms readjusting their labor force size.
They see tech specialties as increasingly needed in all sorts of industries and functions—HR, product and workflow management, e-commerce and communications, cyber security, etc. They argue many companies, not just tech specialists, need to “transform business processes to become more flexible” and can hire tech workers for their own business.
Laid off tech workers probably will find new jobs quickly. Many of them have college degrees, and the overall unemployment rate for college graduates last month was 1.9%. Tech worker skill sets and experience mean their unemployment rate is likely well below that—an experienced and educated tech worker still has an advantage over someone with a more general education and background.
But the tech layoffs highlight a larger structural concern—what happens to this growing, educated, and articulate workforce as they get older and more experienced? Will they reduce their expectations about work and careers? Will they engage in “quiet quitting?” Will they support public policies—and politicians—who offer them more support at work and home? Might they even unionize? I’ll explore these issues in future blogs.
