What layoffs at Google and other tech companies mean for other industries

What layoffs at Google and other tech companies mean for other industries

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What layoffs at Google and other tech companies mean for other industries

Layoffs in the tech sector have become a reality over the past year and especially in recent months as tech companies large and small have made exact layoffs to accommodate their slowing growth. growth after posting record profits during the pandemic. What’s less certain is where those tens of thousands of tech workers will go next.

The good news is that there are still plenty of jobs open for these workers, not just within the tech industry, but also, increasingly, outside of it. There is also increased interest in starting new businesses. And while the layoffs will certainly contribute to some people’s decision to leave the tech industry or strike out on their own, it’s worth looking at issues in the industry itself, from burnout to bad practices. dismissals, which make things a little easier for people. choosing a life after technology.

“What drew everyone to Big Tech was because they went crazy with the benefits, and it was so sexy – and everyone was so intrigued by it,” said Kate Duchene, CEO of the professional recruitment company RGP. “The downside is you’re fired with a 3 a.m. email. Or the reason you found out you were fired is because your badge no longer works.”

It’s all part of a cultural about-face happening at big tech companies, which for years have gobbled up highly skilled workers by wooing them with big paychecks and lavish perks. Now these companies are preaching austerity and asking their giant workforces to act like startups again. At the same time, the tech giants have gone from exciting workplaces to little different from the rest of corporate America, leading some to wonder what they were seeing in the industry in the first place.

Although they made a lot of headlines, the recent layoffs look more like a course correction than a bursting bubble. That doesn’t mean it isn’t painful. Already this year, 78,000 workers in the technology industry have lost their jobs, after 160,000 last year, according to Layoffs.fyi. But while the layoffs are hugely destructive for those involved, their numbers aren’t yet enough to put a real dent in the massive tech job market.

As a whole, the U.S. tech industry, which includes companies like Google and Apple, added employees for the 25th straight month in December, according to data from industry association CompTIA. The number of people working in technology professions – the association defines them as technical IT-related roles, such as software developer, network engineer, data analyst – was at an all-time high of around 6.5 million this month, and their unemployment rate was near a record low of 1.8%, compared to 3.5% for all jobs. It’s certainly possible that those numbers changed in January, but tens of thousands of layoffs won’t move the needle much in an industry of millions.

According to CompTIA, most people with tech occupations — 59% — don’t actually work in the tech industry. This figure has remained remarkably stable over the past decade. That’s because even though companies in finance, healthcare, and retail have started to need more tech talent to help them digitize and automate their businesses, the tech industry, especially software development, has also grown. But the balance could tip even more towards companies in the non-tech industry in the months and years to come.

“As we approach 2023, if we see some of these changes happening right now, it wouldn’t surprise me to see that we see a greater representation [of tech workers] outside of technology,” Tim Herbert, director of research at CompTIA, told Recode. He added that he doesn’t expect a huge exodus of workers from the tech industry, but given the size of tech employment, even a change of 1 percentage point would be noticeable.

It’s important to remember that the tech industry employs all kinds of workers. While we don’t have a breakdown of the types of jobs tech companies have dumped, it’s safe to say that many of them are in jobs that don’t require an IT degree, like human resources or the sales. For example, while Google’s California layoffs certainly affected people in engineering positions, they also included nearly 30 in-house massage therapists. For employees who have been laid off in recent weeks, their decision to find a new tech job, leave the tech industry, or start their own business may hinge on what exactly they did in tech.

Workers with in-demand technology skills, namely engineers, will likely find it easier to find more work, wherever they decide to go. According to a December 2022 report from tech recruitment platform Dice, there were around 300,000 job openings for tech professionals in December, down from its peak but roughly consistent with the past four years. The largest and fastest growing industries for tech professionals are finance, manufacturing, and healthcare. Meanwhile, the list of top tech talent employers includes big tech companies like Google and Amazon alongside giants like Wells Fargo, General Motors and Anthem Blue Cross.

“Given the scale of downsizing in the tech industry and the well-known reasons for these decisions, we’re likely to see many tech professionals think twice about taking on their next role at a technology giant. technology or a startup,” Nick Kolakowski, editor at Dice, told Recode.

Michael Skaff made the decision to leave the tech industry long before the current layoffs. He spent the first half of his 30-year career in a variety of IT jobs in the tech industry and the second half outside of it. He currently serves as Chief Technology Officer, CIO, at Jewish Senior Living Group, a healthcare management company. While he admits the pace of tech change is much slower outside of tech, he doesn’t think tech’s philosophy of “go fast and break things” wouldn’t work in industries like healthcare. healthcare, despite its need for technological change.

“There are ways to change existing workflows that allow progress without disrupting or breaking something,” Skaff said. “You don’t want to break health care.”

For companies outside of tech that couldn’t offer such high salaries or didn’t have the cultural appeal of the Googles of the world, now is a chance for them to hire the tech workers they wish for a long time, if they can make themselves attractive enough. These new recruits still won’t come cheap, though. While pay is still the most important thing that pushes tech workers into a job, it’s pay – it’s been that way forever – item #2 on this list is a more recent addition, according to a recent Gartner survey shared with Recode: work-life alignment.

“This certainly presents an opportunity for traditional employers — banks, retailers, healthcare companies — to tap into and perhaps win back some of the employees who left them,” said Graham Waller, senior VP analyst, Gartner Research. .

These layoffs also present an opportunity for workers to strike on their own. Applications to create startups last year were the second highest ever, and tech workers are adding to that trend.

For Joe Cardillo, starting his own business was a way to improve his work and that of others. Cardillo, who led marketing teams at tech startups and was above the ‘grit culture’, started his own management coaching business, The Early Manager, after going through a series of ‘very stressful’ layoffs. since the start of the pandemic. So Cardillo took what they felt they had done well in their old jobs, managing and teaching others to do it, and combined it with their ideas of how to create a good workplace, like giving employees more influence over the conditions of their work. .

“I’m very interested in the idea of ​​workplace democracy,” Cardillo said.

It certainly seems a far cry from the apparent brutality of recent tech layoffs, which left a lot of grudges for it. Whether people will actually get better terms or kinder treatment elsewhere remains to be seen.

We won’t know for years exactly where the workers affected by the recent tech layoffs will end up. It’s possible that this is just a brief aberration in what is otherwise a growing tech sector or that people are shunning Big Tech to found startups that turn out to be the next big thing – this that many say happens during financial downturns, but that might be more myth than truth. Or maybe every company really is a tech company, and these layoffs put the rest of corporate America on a par with tech.

David Jacobowitz has worked for tech companies for most of his career, most recently in sales and marketing at TikTok, when he decided to voluntarily leave to pursue his passion: his own sugar-free chocolate company called Nebula Snacks. He had seen his share of layoffs and knew that “loyalty doesn’t necessarily have to be rewarded”.

Beyond that, however, he realized that the tech industry might just not be for him.

“I looked at the trajectory and the lifestyle that I would have to live for the next 10 to 15 years if I was to move up the corporate ladder within technology and when I really got started, I sort of answered the question: I don’t want to do that.

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