Alexandra Ross
January 23, 2023
The spate of big-tech layoffs has once again upended the dynamic between employers and workers, workers and executives say, leading to prolonged job searches and widespread fear and concern among many in the industry.
“It’s an employer market after years of employees having the benefit of working from home [and] more jobs with higher wages and perks,” said Angela Bateman, who is looking for work after being fired from education technology company Osmo in November. “Employers reassert their dominance – Disney DIS, +2.14%, Google GOOGL, +1.81% GOOG, +1.94%, Meta META, +2.80%, Apple AAPL, +2.35%, Snap SNAP, +2.10%
[are] Ask workers to be on site three or four days a week.”
On Friday, Alphabet Inc.’s Google became the latest tech giant to add to the uncertainty by announcing 12,000 job cuts just two days after Microsoft Corp. MSFT, +0.98% announced 10,000 job cuts. The two join a long list of companies that have announced layoffs in recent months, including Salesforce Inc. CRM, +3.05%, Facebook parent Meta Platforms Inc., Amazon.com Inc. AMZN, +0 .28%, Cisco Systems Inc. CSCO, +1.54%, Intel Corp. INTC, +3.59%, HP Inc. HPQ, +2.47%, Coinbase Global Inc. COIN, +1.45%, Spotify Technology Inc. SPOT, +2.07% and Snap Inc.
As laid-off workers struggle to land new jobs, many executives believe it could increase people’s willingness to stay with their current companies. Former Cisco CEO John Chambers sees it this way: The Great Resignation, in which tech workers jumped from one high-paying job to another has evolved into the Great Recommitment.
“A career used to last two years in a company. It’s been that way for more than a decade,” Chambers, who is now a venture capitalist, told MarketWatch. “Now the last to be hired is the first to be fired. There has been a shift towards employees re-evaluating their engagement with companies, with an emphasis on culture. There is dramatically less turnover.”
But while tech executives foresee a renewed commitment to jobs, ordinary workers see escalating tensions amid job cuts, the mandate to work in the office at least three days a week and the expectation of higher production with fewer resources. They say they are now more inclined to stay with their employers and forgo the job hopping of recent years, rather than embark on a job hunt that could take up to a year with fewer vacancies and increased competition.
“There’s fear of competing with big tech guys because I think their profile is a ‘safe’ bet for scared companies who may be less willing to take risks with people who aren’t from established brands,” said Alex Gammelgard, a San Francisco marketing executive who previously worked at TrustedHealth. In her months-long search for a job, Gammelgard told MarketWatch, she’s “found pretty much everything is closed” since Thanksgiving.
“I see on LinkedIn that within a week a position will have 100 to 500 applicants, which is way more than normal, which shows the impact of the layoffs at Big Tech,” she said.
Altogether, more than 56,500 tech jobs — nearly all in the US — have already been shed this year, according to Layoffs.ai data, and more layoffs are on the horizon. There were 97,171 job cuts in 2022, up 649% from the previous year, consultancy Challenger, Gray & Christmas reported.
Also read: “It wasn’t sustainable or real”: Tech layoffs are approaching Great Recession levels
The sudden downsizing of tech jobs has raised concerns about employers after years of perks and breakneck hiring. According to a survey of 2,162 people conducted in late November, 69% of recently laid-off workers have received no support from their previous employers, and 60% said they were less likely to trust their next employer US workers by BizReport.
“After Meta announced they were cutting 11,000 [in November], others in Silicon Valley soon followed,” Bateman told MarketWatch. “It seemed to open a floodgate; They were just waiting to be cut.”
“Muskification” changes perspective
The layoffs are likely to continue, tech executives warn, as companies scale back activity amid slowing sales. Workers laid off by smaller companies face the prospect of competing for jobs with the tens of thousands of former big tech workers who are now looking for jobs.
Todd Erickson has applied for 70 open positions since he was fired from start-up Phase Change Software in October after six years with the company. He’s only heard of 10 of those jobs.
“It’s been a rough few months,” Erickson told MarketWatch. “I’ve had a role that required me to do whatever needs to be done, including technical writing, legal work, and web development, and haven’t developed any expertise that would be helpful in this job market.”
Adding to the frustration is that job listings on job boards appear to be nothing more than “fishing expeditions,” non-existent job listings from employers looking for unrelated talent Description, said Gammelgard and others.
First take: Big Tech’s layoffs aren’t as big as they seem
A consequence of the current job decline in the tech industry is that some job seekers may have to look for work outside of the industry, predicted Schiffer. “The ‘muskification’ of workforce compression is causing tech companies to reconsider the use of human capital,” he said, referring to Elon Musk’s moves since buying Twitter in October. “We find ourselves in a cycle of contraction after years of overstaffing.”
“The 2023 story is a push for more value and efficiency,” said Dennis Woodside, CEO of Freshworks Inc. FRSH, +1.53%, a veteran of Google, Impossible Foods Inc., Dropbox Inc. DBX, +2, 59% and Motorola Inc.
The elimination of 22,000 jobs at Google and Microsoft last week “exacerbates the problems for tech job seekers” who aren’t developers or programmers, Eric Schiffer, CEO of private equity firm Patriarch, told MarketWatch. “There’s a lot more pain to come.”
Tech workers may be needed more in non-tech companies
The news isn’t all bad, however. Other industries are coveting tech workers, economists say, and the job market remains strong, with an unemployment rate of 3.5% in December, a decade low, according to the Job Openings and Labor Turnover Survey, reported monthly by the US Bureau of Labor work statistics. Even Silicon Valley added nearly 13,000 new workers in December and had an unemployment rate of 2% that month, according to analysis by the Silicon Valley joint venture’s Institute for Regional Studies.
“The other point I’ve been trying to make for two years [was that] the rest of the economy was tech starved,” Federal Reserve Governor Christopher Waller said at the Council on Foreign Relations in New York on Friday. “They couldn’t get enough technicians. You know what? Now for the rest of the economy there are a lot of technicians they can hire to get things done.”
He added, “So I think there’s going to be quite a redistribution of tech talent in the rest of the economy, unlike maybe some other sectors.”
Damien Daurio, who lost his job at DirecTV last summer, found employment as a software contractor for Charles Schwab Corp with the help of recruiters and placement companies. BLACK, +0.91%. Because of his ability to manage software projects, Daurio said it was easier to find another job than it might have been for a non-technical position.
Meanwhile, others who recently quit tech jobs are seeing opportunity in the current climate. Donna Estrin left the cybersecurity industry in October and started a consulting firm in November. “In my opinion, if people are laid off, companies will hire contract workers and not replace full-time workers,” she told MarketWatch. “Companies still have work to do, so they need consultants.”
Muddu Sudhakar, CEO of software company Aisera, expects layoffs into at least the first half of 2023 and credits AI-enabled technologies like his company’s that have enabled him to increase hiring.
But not all job seekers succeed. The prospects are “pretty bleak,” said Erickson, who postponed knee surgery because he lacks full health insurance. “I just applied to Microsoft,” he said, “but I doubt that will work with 10,000 layoffs.”
MarketWatch contributor Gregory Robb contributed to this article.
The spate of big-tech layoffs has once again upended the dynamic between employers and workers, workers and executives say, leading to prolonged job searches and widespread fear and concern among many in the industry.
“It’s an employer market after years of employees having the benefit of working from home [and] more jobs with higher wages and perks,” said Angela Bateman, who is looking for work after being fired from education technology company Osmo in November. “Employers reassert their dominance – Disney DIS, +2.14%, Google GOOGL, +1.81% GOOG, +1.94%, Meta META, +2.80%, Apple AAPL, +2.35%, Snap SNAP, +2.10%
[are] Ask workers to be on site three or four days a week.”
On Friday, Alphabet Inc.’s Google became the latest tech giant to add to the uncertainty by announcing 12,000 job cuts just two days after Microsoft Corp. MSFT, +0.98% announced 10,000 job cuts. The two join a long list of companies that have announced layoffs in recent months, including Salesforce Inc. CRM, +3.05%, Facebook parent Meta Platforms Inc., Amazon.com Inc. AMZN, +0 .28%, Cisco Systems Inc. CSCO, +1.54%, Intel Corp. INTC, +3.59%, HP Inc. HPQ, +2.47%, Coinbase Global Inc. COIN, +1.45%, Spotify Technology Inc. SPOT, +2.07% and Snap Inc.
As laid-off workers struggle to land new jobs, many executives believe it could increase people’s willingness to stay with their current companies. Former Cisco CEO John Chambers sees it this way: The Great Resignation, in which tech workers jumped from one high-paying job to another has evolved into the Great Recommitment.
“A career used to last two years in a company. It’s been that way for more than a decade,” Chambers, who is now a venture capitalist, told MarketWatch. “Now the last to be hired is the first to be fired. There has been a shift towards employees re-evaluating their engagement with companies, with an emphasis on culture. There is dramatically less turnover.”
But while tech executives foresee a renewed commitment to jobs, ordinary workers see escalating tensions amid job cuts, the mandate to work in the office at least three days a week and the expectation of higher production with fewer resources. They say they are now more inclined to stay with their employers and forgo the job hopping of recent years, rather than embark on a job hunt that could take up to a year with fewer vacancies and increased competition.
“There’s fear of competing with big tech guys because I think their profile is a ‘safe’ bet for scared companies who may be less willing to take risks with people who aren’t from established brands,” said Alex Gammelgard, a San Francisco marketing executive who previously worked at TrustedHealth. In her months-long search for a job, Gammelgard told MarketWatch, she’s “found pretty much everything is closed” since Thanksgiving.
“I see on LinkedIn that within a week a position will have 100 to 500 applicants, which is way more than normal, which shows the impact of the layoffs at Big Tech,” she said.
Altogether, more than 56,500 tech jobs — nearly all in the US — have already been shed this year, according to Layoffs.ai data, and more layoffs are on the horizon. There were 97,171 job cuts in 2022, up 649% from the previous year, consultancy Challenger, Gray & Christmas reported.
Also read: “It wasn’t sustainable or real”: Tech layoffs are approaching Great Recession levels
The sudden downsizing of tech jobs has raised concerns about employers after years of perks and breakneck hiring. According to a survey of 2,162 people conducted in late November, 69% of recently laid-off workers have received no support from their previous employers, and 60% said they were less likely to trust their next employer US workers by BizReport.
“After Meta announced they were cutting 11,000 [in November], others in Silicon Valley soon followed,” Bateman told MarketWatch. “It seemed to open a floodgate; They were just waiting to be cut.”
“Muskification” changes perspective
The layoffs are likely to continue, tech executives warn, as companies scale back activity amid slowing sales. Workers laid off by smaller companies face the prospect of competing for jobs with the tens of thousands of former big tech workers who are now looking for jobs.
Todd Erickson has applied for 70 open positions since he was fired from start-up Phase Change Software in October after six years with the company. He’s only heard of 10 of those jobs.
“It’s been a rough few months,” Erickson told MarketWatch. “I’ve had a role that required me to do whatever needs to be done, including technical writing, legal work, and web development, and haven’t developed any expertise that would be helpful in this job market.”
Adding to the frustration is that job listings on job boards appear to be nothing more than “fishing expeditions,” non-existent job listings from employers looking for unrelated talent Description, said Gammelgard and others.
First take: Big Tech’s layoffs aren’t as big as they seem
A consequence of the current job decline in the tech industry is that some job seekers may have to look for work outside of the industry, predicted Schiffer. “The ‘muskification’ of workforce compression is causing tech companies to reconsider the use of human capital,” he said, referring to Elon Musk’s moves since buying Twitter in October. “We find ourselves in a cycle of contraction after years of overstaffing.”
“The 2023 story is a push for more value and efficiency,” said Dennis Woodside, CEO of Freshworks Inc. FRSH, +1.53%, a veteran of Google, Impossible Foods Inc., Dropbox Inc. DBX, +2, 59% and Motorola Inc.
The elimination of 22,000 jobs at Google and Microsoft last week “exacerbates the problems for tech job seekers” who aren’t developers or programmers, Eric Schiffer, CEO of private equity firm Patriarch, told MarketWatch. “There’s a lot more pain to come.”
Tech workers may be needed more in non-tech companies
The news isn’t all bad, however. Other industries are coveting tech workers, economists say, and the job market remains strong, with an unemployment rate of 3.5% in December, a decade low, according to the Job Openings and Labor Turnover Survey, reported monthly by the US Bureau of Labor work statistics. Even Silicon Valley added nearly 13,000 new workers in December and had an unemployment rate of 2% that month, according to analysis by the Silicon Valley joint venture’s Institute for Regional Studies.
“The other point I’ve been trying to make for two years [was that] the rest of the economy was tech starved,” Federal Reserve Governor Christopher Waller said at the Council on Foreign Relations in New York on Friday. “They couldn’t get enough technicians. You know what? Now for the rest of the economy there are a lot of technicians they can hire to get things done.”
He added, “So I think there’s going to be quite a redistribution of tech talent in the rest of the economy, unlike maybe some other sectors.”
Damien Daurio, who lost his job at DirecTV last summer, found employment as a software contractor for Charles Schwab Corp with the help of recruiters and placement companies. BLACK, +0.91%. Because of his ability to manage software projects, Daurio said it was easier to find another job than it might have been for a non-technical position.
Meanwhile, others who recently quit tech jobs are seeing opportunity in the current climate. Donna Estrin left the cybersecurity industry in October and started a consulting firm in November. “In my opinion, if people are laid off, companies will hire contract workers and not replace full-time workers,” she told MarketWatch. “Companies still have work to do, so they need consultants.”
Muddu Sudhakar, CEO of software company Aisera, expects layoffs into at least the first half of 2023 and credits AI-enabled technologies like his company’s that have enabled him to increase hiring.
But not all job seekers succeed. The prospects are “pretty bleak,” said Erickson, who postponed knee surgery because he lacks full health insurance. “I just applied to Microsoft,” he said, “but I doubt that will work with 10,000 layoffs.”
MarketWatch contributor Gregory Robb contributed to this article.
