Widespread layoffs in the tech industry have shifted us back into the unprecedented times we thought ... [+]
Just when it seemed as though the economy could not get any worse, the most wonderful time of the year turned into the 12 days of tech layoffs.
Leading the movement like Rudolf through the night is none other than Elon Musk, who has rattled news headlines for weeks after deciding to lay off roughly half of Twitter’s 7,500 employees. Though Twitter’s restructuring has soured opinions of the company, other corporate tech giants are following closely behind. Leaders at Amazon, Asana, Meta, Stripe, Cisco, and Upstart said they have started to lay off employees or have made plans to do so — and those are just a portion of the companies who released public statements last month.
The caliber of these layoffs will vary widely by company — Meta announced it will let 11,000 employees go, a figure roughly comprising 13% of its total staff, while Cisco says it will drop 4,100 workers (5% of staff). These pink slips may pale in comparison to the drastic measures Musk has taken to restructure Twitter’s staff and company culture, but they lead to the same outcome: thousands of highly educated and well-paid employees will soon be out of a job, looking for work in an industry that doesn’t seem to be hiring anytime soon. To risk reincarnating a phrase kindled during the pandemic: we’re living in unprecedented times.
In the best-case scenario, news about impending layoffs will cause an overreaction capable of fueling the kind of chaos seen during the American toilet paper crisis of March 2020. In which case, people should calm down after a few months. However, the rising number of tech companies announcing layoffs – and the high proportion of employees being placed on the chopping block – suggests otherwise. It’s become increasingly difficult to put faith in the notion that any of this is just part of the latest industry fad to follow free snack stations.
Many companies who have given reasons for their layoffs have pointed to the dwindling economy. CNBC reports that the tech industry lost 7.4 trillion dollars over the last year. Rapid hiring, seen especially during the pandemic, a time when technology drove nearly all synchronous tasks, have finally caught up with tech companies. According to CompTIA’s Tech Jobs Report, roughly 500,000 jobs were added in the tech industry from November 2020 to August 2022.
Finally experiencing the growing pains from these new hires, companies have been forced to tighten their grasp on spending, many of them doing so for the first time. Their method? To remove unnecessary slack that flew under the radar when company profits rose and new hires filed in. As Adam Firms’ Chief Executive, Mark Stoeckle, told the Wall Street Journal: “Negative productivity can be hidden when everything is going great.”
With economists predicting an inevitable recession ahead of us, it’s hard to say how long layoffs will continue – or if Silicon Valley will break free from its new minimalist approach. HP Inc. said it will let 4,000 employees go by 2025. Amazon, which issued a statement in early November about plans to pause hiring, has also succumbed to laying off workers. The total number of layoffs, though not officially known, has been reported by news sources at 10,000. According to Amazon CEO Andy Jassy, the company will continue to lay off more employees in early 2023 as it finalizes its planning process and readjusts.
Which is to say, as the tech industry’s turmoil crescendos into the last month of the year, predicting the job market in 2023 becomes complicated. People may assume the onslaught of layoffs will increase the number of people applying for the select few tech companies looking to hire, but this isn’t necessarily the case.
According to CompTIA’s report, more than 300,000 tech jobs in the U.S. were available in October, roughly 100,000 more jobs than those available one month prior to the pandemic. Experts like Rick Chen, head of public relations for Blind, says employees still have available options available to choose from. Employers able to communicate the stability of their company will have a better chance at hiring the job pool’s fresh faces and attract high-level talent.
Still, none of these projected scenarios provide much relief to the anxious employees sitting on the edge of their office chairs, unsure of whether they will ring in the new year with a steady paycheck.
Data from the U.S. Census Bureau estimates that 39% of Americans ages 25 to 39 who have their Bachelor’s degree or higher majored in either science or engineering. Having graduated roughly between the years of 2005 and 2019, it’s not difficult to imagine why this age group, the youngest in the study, has the highest proportion of science and engineering graduates. These millennials (along with some Gen Z’ers) attended college right after the dot-com bubble crash. The oldest in the group had just started college journey when the disciplines of science, technology, engineering, and math were mashed together to create S.T.E.M., an acronym the youngest in this demographic would hear more about with each year that passed. As these students grew up, they became smarter, stronger, and faster – and watched the next generation of iPhones do the same. Meanwhile, they witnessed college students graduate in a recession with thousands of dollars in debt while college dropouts working at Silicon Valley startups made more money than they knew what to do with.
Half of people who graduated college during this time would have degrees in science, engineering, or a field related to the two. Yet, these are the same people who, now no older than 40, refresh their email inboxes in hopes they won’t receive an email that says “We regret to inform you…”
We can wind down the last days of 2022 combing through statistics and occupational outlooks in an attempt to predict what the job market will look like in 2023 – or the year after that, or the year after that. Though, ironically, it seems that this kind of mathematical thinking has created a feedback loop that has perpetuated the situation we’re currently in. When data favored the S.T.E.M. industry, we encouraged students to chase after degrees in computer science and engineering by touting about the benefits of wealth and stability. As we already knew – but just finally realizing – data don’t provide an accurate outlook if they fail to take into account a future virus that kills millions or a foreign conflict that suddenly upends global trade. Yet, two decades and millions of S.T.E.M. degrees later, it seems that our faith in data has only grown.
Perhaps the answer to our question about next year’s job market won’t come by calculating the right statistic, but by changing the way we look for the answer – should we choose to look for one at all. Perhaps instead of handing students a chart that predicts the likelihood of getting a job across various industries, we should remind them instead of the mantra “we’re living in unprecedented times.” Then, after a brief pause, follow it up with a new mantra: “And we always will.”
