tech worker

By Ringside Talent Partners

June 24, 2024

Being a tech employee, especially in Silicon Valley, has rarely been more perilous

Carmen Kiew has some encouraging words for her fellow tech workers, despite the constant toll of layoffs from which no one seems to be safe.

After an initial reaction of being “bitter, pissed and talking shit about Elon [Musk]” in the wake of mass job cuts at Twitter last year, she quickly landed on her feet at Codeword, a communication-design agency.

“I was devastated, but life goes on and I feel fortunate for where I work now,” said Kiew, who never met Musk but witnessed him famously carrying a kitchen sink through Twitter’s San Francisco headquarters after he bought the social-media platform in October 2022. She chalked up her good job fortunes to networking as well as the name recognition of Twitter.

Kiew is an exception to the rule these days. Being a tech employee, especially in Silicon Valley, has rarely been more perilous.

More than 50,000 workers have been laid off in a wave of corporate austerity this year, and 262,682 lost their jobs in 2023 as Alphabet Inc.’s (GOOGL) (GOOG) Google, Facebook parent Meta Platforms Inc. (META), X (formerly Twitter), Salesforce Inc. (CRM), eBay Inc. (EBAY), Inc. (AMZN) and other big companies shed employees. If anything, such layoffs have proved that no one is safe, whether their job is in manufacturing, engineering, marketing or the C-suite.

Perhaps the biggest catalyst – some might say culprit – in the tech tightening is Musk, the chief executive of Tesla Inc. (TSLA), who normalized the idea of massive layoffs in the pursuit of profitability – and as a reflexive response to the entitled Silicon Valley mythos of free food and healthcare, on-site gyms and extravagant salaries and stock options.

Also read: America’s labor market looks great on paper. So why is it so hard for some workers to find a job?

Since the salad days of COVID-era hiring and booming business for Big Tech, things have lurched in the opposite direction as companies cope with cooling sales and a shift from growth to revenue and profitability. The era has been one of downsizing, shelving, sidelining, retrenching and belt-tightening.

“Tech companies were drunk on hiring during the zero-interest-rate phenomenon,” said Nolan Church, the former head of talent at DoorDash Inc. (DASH) who is now CEO of executive-recruiting service Continuum. “The workforce is the largest line item in the [profit and loss statement].”

Bradford Williams was laid off in February 2023 from Rigetti, a quantum-computing pioneer in Berkeley, Calif., and is still looking for a gig as a spokesperson. “When interest rates spiked, Rigetti had to make a hard pivot from growth to profitability,” Williams said. “Since then, we’ve seen the [Silicon Valley Bank] collapse, continuing economic uncertainty and mass layoffs, which continue. It’s pretty tough out there.”

When Meta CEO Mark Zuckerberg declared a “year of efficiency” in 2023 that preceded corporate bloodletting, he helped set into motion a layoff culture at the very companies that overhired and overspent during the pandemic.

Alex Whedon, a former Instagram engineer who was let go last year, wasn’t entirely surprised – in fact, he was relieved. “I am much more fulfilled now doing 20 hours of important freelance work than I was from 40 hours or more on an Instagram project,” he said.

Kiew and Whedon offer examples of the divergent paths people are taking in what has turned into a brutal, highly competitive tech-job market in which companies are doing more with fewer employees.

A survey of 1,000 knowledge workers in the U.S. bears this out. Nearly three-quarters said that the waves of layoffs over the past two years have made freelance work more attractive than before, and 64% said they have lost trust in the stability and security of full-time employment because of layoffs, according to Joe Lazauskas, head of marketing at hiring firm A.Team.

Fewer than half of laid-off workers are looking for another job in the same field, while 26% are pivoting to an entirely new field, and the other 25% are freelancing or starting their own business, according to A.Team research.

Conversely, employers are struggling to fill IT jobs, particularly in artificial intelligence and machine learning, according to a recent Digital Transformation report. Nearly a third of those polled said it takes four to six months to fill IT jobs, with AI and cybersecurity considered the most critical skills for the next 12 to 24 months.

Adam Nash, co-founder and CEO of charitable platform Daffy, attributes the nightmarish tech-job scene to three trends:

— Software companies are flattening their bloated organizations, which were overbuilt throughout the pandemic for unsustainable growth.

— Companies want to invest in AI, but AI talent and infrastructure is expensive, so something has to give. The days of funding the growth of all teams are over, so companies are cutting less strategic areas in order to fund new initiatives.

— Late-stage private companies, especially unicorns, are still right-sizing their teams based on their near-term business prospects and a tough financing market.

As jobs have evaporated, salaries have contracted. Hired’s latest State of Tech Salaries Report found that inflation in the U.S. had deflated tech salaries to a five-year low, with junior job seekers feeling the biggest pinch from budget cuts and the injection of generative AI into the workplace.

In the eight months since he was laid off, digital-marketing strategist Brian Lange has decided to go back to school and earn a third master’s degree. “It’s insane, feeling desperate,” he said.

LA Lassek worked at Salesforce for five years before a workforce reduction in spring 2023. She took an extended break from the grind and now she’s back on the job hunt.

“I went from 60 to 0, and now I’m going from 0 to 60,” Lassek said. “The job market is so much different than five years ago. I didn’t even have a resume. There are so many people on the market, and companies are looking for a unicorn. I’m getting antsy.”

Tech’s ‘three-headed monster’

The gut-wrenching changes and their fallout have ushered in a new era of culpability and austerity after the heady days of pandemic binge-hiring.

Adam Jackson, CEO of the global talent network Braintrust, blames the “three-headed monster” of Musk, bloated workforces and AI for the latest disruptions in Silicon Valley hiring.

“Elon fired 80% of X and demonstrated in a seminal moment that tech companies can be run with fewer people,” Jackson said in an interview. “We went to 30 from 90 [employees] due to AI. It was the day the entitled culture shifted from, ‘What type of vegan snacks do I get for free?’ to ‘Holy shit, what is my job and what should I do about it?'”

Mimi Gross, a former tech recruiter turned job-search strategist, said that during the pandemic, “business was never better. … Now, things are being over-corrected” in tech. “This is a cycle that has happened in other industries,” she said. “What goes up must come down.”

The national unemployment rate, meanwhile, remains a historically low 3.9%.

Eclipse, a venture-capital firm that invests billions of dollars into physical industries, recently issued a report that outlines the need for a workforce skilled in both domain expertise and digital technologies in the manufacturing, supply-chain, transportation and defense sectors.

Since 2017, job postings seeking digital skills have grown some three times faster in the physical sector than in the tech industry. In that same period, the top 10 traditional occupations in physical industries, including plumbers and warehouse workers, have, on average, seen a 198% increase in job postings requiring digital skills.

“There are a lot of knee-jerk-style doom discussions in regards to the layoffs sweeping across Silicon Valley, but California and the Bay Area have been down this path before,” Murat Bicer, general partner at early-stage VC firm CRV, said in an email. “It is a natural regenerative cycle that time and time again, decade after decade, provides our industry with fertile grounds upon which the next generation of new startups emerge.”

Booms and busts inevitably happen in tech as they do in other major industries, forcing employees to reinvent themselves amid the highs and lows, Gross said. What is most important, she said, is adjusting job skills and perspective.

Kiew agrees. “Despite it all, I love my time at what I will always call Twitter,” she said. But after being laid off, “I prioritized my work-life balance and improved my quality of life. My job did not define who I am, and my layoff was not a failure on my part.”

Now read: Can you negotiate severance if you’re laid off? It’s possible – and it’s the ‘No. 1 thing’ most workers leave on the table.

Courtesy of Morning Star