Many tech workers still reel from the juggernaut of massive layoffs that began late last year.
Historically, tech workers have experienced layoffs more than once in their career. In previous years, through the dotcom bubble bust in 2000 and the great recession in 2007, tech workers expected layoffs to mean 5 to 50 employees being let go.
But late in 2022, Alphabet (Google), Meta (Facebook), Microsoft, IBM, and other tech companies began chopping off whole divisions with massive layoffs.
Layoff.fyi states that 475 tech companies have laid off a total of 127,354 employees as of this writing.
Some news reports attribute layoffs to economic recession, the war in Ukraine, the trade war in China, or even the pandemic changing the working lifestyle. But how do tech insiders explain the layoffs now? Several tech experts emailed The Epoch Times their insights about the situation.
HR consultant Sedaa in San Ramon, California counts among its clients Cisco, Maxim, Lam Research, Flextronics, and Agile/Oracle.
Its chief visionary officer, Elham Assadi, stated: “I’ve been working in Silicon Valley since 1996 and this is not the first time I see this kind of lay-offs. I had to lay off my entire team, my colleagues on behalf of my VP, then my VP and I were both laid off. This happens every 10 years or so in big or small chunks depending on that decade’s economical precursors. It was about time for this to happen.”
She said even with recent developments, the pattern is still the same.
“First they fire the contract workers, then the employees. But they realize they still need to do the work. So, they hire new contract workers to save the 30 percent overhead (benefits for full-time employees) and show better numbers (to look profitable for auditors, especially if the company is set to go public).”
She said that is why companies like hers get so busy after layoffs.
George Haber, founder and CEO of tech market research company CrestaFund in Virginia, agrees and attributes it to “the seasonal and cyclical nature of tech.”
He wrote: “During good times, companies tend to over-hire and during bad times, they over-shrink. This is just the nature of corporations.”
Mihai Murgulescu, who works for a tier-1 semiconductor company in California, explained: “Companies exist to make money. But in the last years, the Internet giants mostly shifted their publicly stated mission to all kinds of causes.”
He calls these causes “moonshots”—in the current context of tech, a long shot or “to shoot for the moon.”
“Next thing, you end up with a staff of crusaders and there’s no going back. You can’t turn the clock back and ask them to become employees again,” Murgulescu stated. “Moonshots are largely staffed with believers for whom defying gravity is the norm. Financial concerns and accountability are for the regular engineering departments, not for the ‘enlightened’ who push for progress. An aggravating factor was the drive for recognition within the company. This generated the inevitable conclusion that productivity doesn’t really matter.”
Rex Lee, cybersecurity advisor at My Smart Privacy in Texas, wrote: “Many tech companies were losing money on new apps/platforms that can’t generate profit. Plus, legacy apps/social media platforms like Facebook, Instagram, Amazon and others are facing competition from Chinese app/social media platform developers that include ByteDance/TikTok, Temu, Shein, Tencent/WeChat, Baidu and others.”
Lee also cited Facebook’s numerous lawsuits in several countries and the more recent banning of TikTok on U.S. government devices because of privacy and security issues.
“They may be popular today” but fade away the next moment, Lee said. He said technology begets second-party and third-party providers plus numerous support groups, so when the tech isn’t so hot anymore, “there will be a department-size lay-off.”
Haber stated: “Technology trend shifts, like the PC and Internet.”
He said that when they were unveiled “there was a huge growth spurt,” and then it slowed and the stage was set for the next “big thing.” Recently, it was artificial intelligence (AI).
In the ensuing panic of “career transition,” many tech workers opted to move out of tech or out of town for gainful employment or any employment. Those left behind jumped from one job to another in a space of two or three months.
This was a pattern savvy tech workers did not indicate in their resumes, since tech recruiters would mark it as a point against them.
Some job seekers have begun to repurpose LinkedIn by aggressively connecting within and without their networks to solicit, instead of the usual chatter.
Assadi said most of Sedaa’s hires are contractual.
“What I have noticed is that once again, people are more flexible with their status. The feeling of security of a full-time job is no longer valid. They’re more open to contract positions. Also, they’re becoming more flexible with their expected hourly rates. This shifts the market towards an employer as against an employee market,” she said.
Haber does not paint a rosy picture. “As more [tech] workers leave the industry, the industry may lose some of its most experienced and talented workers. Additionally, the emergence of chatbots and other similar products could potentially displace many software engineers and other white collar non-expert workers in the industry. This could be a major challenge for the [tech] industry as it adapts to the growing use of AI and automated tools,” he said.
Lee sees the tech industry as evolving.
“Decentralized Web3 is on the horizon and that means an end to monopolistic control over the Internet we see today by Google, Apple, Microsoft, Amazon, ByteDance and Tencent,” he said.
Some people idealize a decentralized worldwide Internet—Web3—as the next evolution, given today’s privacy and security issues. Non-fungible tokens (NFTs) and cryptocurrency are concepts that grew out of Web3.
Haber, Murgulescu, and Lee agree that AI is here to stay and so will layoffs.
Assadi’s parting shot to job-seekers: “We’re going through hard times but if we weather the storm, it will pass. This is a learning experience especially for millennials, gen Xs and Zs. Unlike the older generation who took jobs for granted. Hopefully we’ll be more open and flexible and revalue having a job. Think outside the box, consider other options. But don’t let your resume show gaps for future job [applications]. If you take too long, your CV will be harder to sell in a year or so when more jobs are back.”