Tech Layoffs Surge as Big Players Trim Workforce; What's Driving the Trend?
Tech giants such as Google and Microsoft have recently let go of a large number of employees. There was a 10% rise in layoffs in 2023 compared to 2022, according to an analysis of Bureau of Labor Statistics data, via Nerd Wallet. Things are getting hard, according to Deedy Das, a well-known figure in the tech industry. He has been discussing on X (formerly Twitter) how things have changed significantly in the last 20 years. The job market for techies is changing.
A degree in computer science once made it easy to get employment in fields like Edtech. However, Deedy says that things aren't so simple anymore. Startups are interested in hiring those who already have experience, not fresh graduates.
Impact of technological advancements
Deedy has been reflecting on the extent to which technology has changed our lives. It wasn't that big of a deal in 2000, but these days, we use it for practically everything. However, contrary to popular belief, technology isn't producing more jobs even if we use it more than ever. Businesses are more concerned with efficiency than with hiring large numbers of employees.
In the last 20yrs, "study CS and work in tech" became a "path" to wealth
— Deedy (@deedydas) May 2, 2024
Now:
—BigTech did layoffs, aren't hiring
—Tech job postings are ~40% of '21
—Startups often prefer tenured hires
—Huge pipeline of CS majors: 40% of MIT
Winter is coming for software engineering.
🧵
1/5 pic.twitter.com/VPU6WWuTTl
Moreover, artificial intelligence (AI) is replacing human labor in several roles. According to Deedy, this may result in fewer opportunities for software developers, particularly if the software is not designed with human needs in mind. Deedy doesn't see things turning around quickly for tech jobs. Startups aren't keen on spending money to train new grads because it's expensive. So, a bunch of people who studied Computer Science can't find jobs because what they learned in school doesn't match what companies want.
Rise in tech layoffs
By 2023, a significant number of people in technology lost their jobs—about 262,682, per NerdWallet. In 2023, Amazon cut 27,410 jobs. Meta (formerly Facebook) is next with 21,000 layoffs, followed by Google with 12,115 and Microsoft with 11,158.
The Bureau of Labor Statistics reports that as of December 2021, the unemployment rate has remained between 3.4% and 3.9%. The dropout rate is higher than usual. This means that they feel reasonably confident of achieving a new position, according to the Federal Reserve Bank of St. Louis. According to Louis, this year's retirement rate is among the highest in more than 20 years.
Tech layoffs and economic trends
Layoffs.fyi founder Roger Lee has been overseeing tech layoffs since 2020 when the pandemic started affecting the startup. With so many people using the internet for work and play, technology companies increased productivity to keep up with demand. This pattern continued to grow through early 2022, and with the Federal Reserve lowering interest rates in 2021, digital giants like Meta and Twitter began to decline in late 2022 and early 2023.