According to Layoffs.fyi, the tech sector is starting the new year with the same shake-up as last year: 150,000 tech workers will lose their jobs by 2022, with more than half of that happening in November alone, and December, according to Layoffs.fyi. And more than 18,000 tech workers were laid off by big companies like Amazon and Salesforce in the first half of January.
Roger Lee, the creator of Layoffs.fyi and founder of HR technology based in San Francisco, said more massive layoffs could be on the way. He began tracking tech layoffs in March 2020, in part to connect unemployed workers with hiring managers at companies that are still growing through the pandemic.
Despite the recent wave of layoffs, Lee says there is some hope that the current wave of cuts could slow. Lee said the latest wave of tech layoffs began in the spring of 2022, around the time the Federal Reserve began a series of aggressive policies. interest rate hike.
“There is a clear correlation between the Fed raising rates and these tech companies laying off employees,” Lee said. That’s because as interest rates rise, it becomes more expensive to borrow money and grow businesses. Many tech leaders, including Meta’s Mark Zuckerberg and Amazon’s Andy Jassy, say the new layoffs are a the result of hiring too much in the past two years.
Still, Lee said, “As of now, the Fed is expected to slow down the pace of rate hikes, and many believe that by the end of the year, they’ll pause to raise rates and maybe even start raising rates.” lower interest rates.” When that happens, likely in the second half of 2023, “I really hope that the tech layoffs will eventually ease,” Lee said.
The important thing to remember is overall job market quite strong, and tech workers who lost their jobs are quickly being hired back. As of November, the layoff rate was less than 1% of the workforce and there were 1.7 job openings per worker available, according to Labor Department data.
“There are more companies still hiring and more job openings than there are layoffs, so there is reason to be optimistic for those who have been laid off recently,” Lee said.
How to find a job in a layoff environment?
With layoffs, Lee says it’s important to research a potential employer’s stability.
First, you’ll want to find out what the company’s current business priorities are — are they redeploying, scaling, or launching something new? What are they prioritizing and eliminating?
Then make sure your expertise aligns with the company’s priorities and their core business strategy now.
If it’s a public company, Lee recommends looking at their earnings to see if they’re profitable or growing. That kind of information is harder to find for private companies, so you can ask the employer directly: Is the company profitable? If not, how much cash is it?
You might also mention the elephant in the room: How has the company prepared for a potential recession and what role does this particular company play in that?
You should also ask if the company has done layoffs before. If so, what was the reason, and how did they text? How did they handle the departing employee? How have leaders considered the impact on the morale and productivity of those who stay?
“People are more sensitive to this now,” Lee said. “Understanding a company’s past actions can help job seekers understand how the company makes decisions and how it treats its employees throughout the process.”
Also keep in mind that despite some recent patterns of layoffs, not every company is focused on cutting costs in the same way. For example, says Lee, “while one company might lay off its advertising department, because it focuses less on advertising revenue, another company might actually invest very heavily in advertising.” .”
Finally, Lee recommends checking to see if the company lists salaries in their job ads and any other information about their online pay philosophy.
a few state and city, which includes California, New York City, Washington and Colorado, is legally required by employers to include salary ranges on their job listings. And Lee’s new website Comprehensive.io is a database of open tech jobs and payments are listed in one place.
Lee said job seekers can use this information to understand their market value in general and where they might work for a particular employer. Beyond salary potential, he adds, a company’s salary information “can be a signal of what it values, both in terms of compensating employees fairly, but also in terms of compensation.” just their approach to employee transparency in general.”
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After having his job offer canceled and endless interviews, the 35-year-old set up his own business.
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