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Some people will see "danger", others will see "machine".
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Author | Lexie
Edit | Lu
Source: Business Insider
On Monday, Facebook parent company Meta said it would lay off another 10,000 jobs, becoming the first major factory to announce a second round of large-scale layoffs. Meta just laid off 11,000 jobs four months ago;
On Wednesday, recruitment platform giant Indeed said it expects to lay off about 2,200 jobs, or 15 percent of its workforce;
Today, consulting and IT outsourcing services Accenture said it will cut 19,000 jobs, or about 2.5 percent of its total workforce, over the next 18 months.
The big layoffs in the tech circle, which began to intensify since the middle of last year, have experienced a small climax since the beginning of this year, with Salesforce cutting 10% (about 7,000 people), Amazon cutting 1.2% (about 10,000 people), Alphabet laying off 6% (about 10,000 people), and Microsoft laying off 5% (about 10,000 people) one after another, which makes the number of unemployed in the United States exceed 100,000 in just one month, not only a new monthly high in two years. That's five times more than the same time period a year ago.
According to Layoffs.fyi, 482 tech companies have laid off jobs so far this year, bringing the total number of layoffs to more than 120,000. As the financial environment continues to tighten, the pressure on technology companies' earnings exceeds the growth momentum, and layoffs and salary cuts in order to reduce costs and increase efficiency have become inevitable issues, it is difficult to maintain confidence in the current job market, especially in the technology circle, which has been regarded as a golden rice bowl in the past two years.
When tech giants frantically lay off people, where did so many practitioners who were laid off go?
01
Self-correction by tech companies
According to CompTIA, almost 59% of tech workers in the past 10 years have been employed in areas such as finance, retail and healthcare, as many companies in these sectors are also accelerating digitalization and automation, and the demand for tech talent is increasing.
Jobs such as engineers, which still have a hard technical body, are still in high demand, with a ZipRecruiter survey late last year showing that 79 percent of layoffs found a new job within three months. The number of tech jobs in the United States reached 300,000 in December last year, which is not the highest peak, but it is still basically in line with the trend of previous years
Monthly U.S. Tech Job Postings | Source: Network
At a time of frenzied layoffs at tech giants in January, overall tech job hires were still up from December, with demand coming from a variety of industries such as government, insurance and finance, and even institutions such as Citi and the IRS
Tech Industry Employment | Source: Network
In recent years, technology manufacturers have attracted many high-quality talents with generous salaries and benefits, and in this wave of layoffs, startups and traditional industries such as retail and medical can "profit" and are no longer at a competitive disadvantage, although the requirements of technology practitioners in salary will not be reduced, but the matter of working in large factories no longer looks so cool, and more and more people tend to seek stability in other industries with less variables. The benefits of joining the company and the golden title of the big factory are shattered by a copy-pasted dismissal email and the cold reality that the key card cannot be used at the time of layoff, which really makes people think about re-employment in the big factory.
According to a Gartner survey, while salary is still the first consideration for job searches, the new option of work-life balance has become the second consideration for job seekers, and for companies that want to "fish" talent at this point, if they can't give the best salary, maybe giving tech workers the stability and balance they want can be surprisingly successful.
After conducting interviews with CIOs and headhunters at multiple companies, TechCrunch concluded that we can still be optimistic about the current job market. These tech employment experts generally believe that it is not so much the bursting of the Internet technology bubble that we are currently seeing more like a large-scale correction within the technology circle. While we are witnessing the most brutal layoffs in the past two years, the fact is that the "growth above all" attitude over the past few years has made most tech companies more or less overcrowded, so the current correction does not represent a reduction in overall demand for tech workers. For example, Google's layoffs in California include positions such as engineers, but also dozens of non-tech positions such as masseurs, and when we separate such data from the panic of "crazy layoffs in big factories", we will see more clearly that the current reality is that perhaps the non-technology talent market will become tight, but technology employment is still developing positively.
02
In the end, the start-up strikes strongly
This wave of layoffs has made many unemployed people realize that as long as their employment fate is in the hands of others, the risk of being laid off will always exist, so in addition to re-employment, many people choose to start their own careers.
The number of applications filed by startups to Y Combinator increased by 20% in December, and in January this year, the number of applications reached 5 times that of this year.
Clarify Capital LLC's survey of 1,000 tech workers who were laid off found that 63 percent of them had started their own companies and earned more than before.
These new founders have also built a variety of new businesses, such as David Jacobowitz, who has basically worked for technology companies all his life, and has been in charge of marketing on TikTok in recent years, but this time chose to voluntarily quit to pursue a side hustle that has nothing to do with technology - sugar-free chocolate brand Nebula Snacks.
Source: CPGD
Some people still choose to innovate on familiar tracks:
Jen Zhu, who previously led strategy and growth at Carbon Health, known as the "Starbucks of healthcare," established his own company, Maida AI, after the layoff, focusing on using AI technology to improve the efficiency of clinical and healthcare systems.
Joe Cardillo, who manages marketing at several startups, went through a series of painful layoffs and founded his own management consulting firm, The Early Manager, to help employers and employees create a more open and friendly corporate culture.
Others have transferred what they have learned to other tracks that interest them:
For example, Nish Junankar, an engineer who previously worked for NFT marketplace OpenSea, chose to quit after a large number of colleagues were laid off to set up the Feasier home trading platform.
After being fired from the mortgage platform better.com, Anmol Sahai founded legal tech company Composure, which works to automate the day-to-day work of the legal affairs department.
Peter Henry, who was fired from his vice president position at MetaMap, founded Farmer Friends, turning his love of agriculture into a business that helps farmers access financial services such as digital banking and lending, and the coffee farm he bought out of interest in the Dominican Republic has become the best information channel for understanding how the industry works.
Despite the variety of new start-up tracks, their menacing momentum has managed to attract the attention of investors.
Many people believe that the current economic downturn is a repeat of the bursting of the dot-com bubble in 2000 and the financial crisis of 2008, and another reason why investors are particularly excited about this wave of layoffs/startups is that before and after the past economic crisis, Phoenix Nirvana has produced today's tech/business giants, such as Google, which grew rapidly after the 2000 crisis, and Airbnb, Slack, WhatsApp and Square companies born before and after the 2008 economic crisis.
In fact, about half of all Fortune 500 companies were born in times of crisis. Whether it's the need for redistributed talent, the desperate struggle of the frustrated, or the stubbornness of trying to turn misfortune into luck, the undercurrent of a crisis always gives hope for a new life.
For investors, while global venture capital fell by 33% overall in 2022 to about $483 billion, investment flows to early-stage startups remained solid, with angel and seed rounds completing $37.4 billion, close to the record in 2021.
There are also some investment institutions that are determined to help founders who chase their dreams after being unemployed in this wave of layoffs, such as:
San Francisco-based Day One Ventures launched a program called Funded Not Fire late last year, with the goal of investing $100,000 in 20 new startups created by the layoffs, and the elite companies that stand out among them will receive another $1 million from Day One Ventures.
Partner Masha Bucher said she believes at least 0.1 to 1 percent of the tech talent laid off will grow into great founders, with Day One setting aside a total of at least $5 million for the project, and even a maximum of $10 million. As of February this year, it had completed investments in seven companies, 25% of which were founded by women, and had received more than 1,200 applications.
Index Ventures, a well-known Silicon Valley promoter that has invested in Facebook, Etsy and Skype, and Austria's VC Speedinvest, and Venture Partners, a Silicon Valley investment agency, have launched similar programs to set aside funds to invest in newly founded early-stage startups.
Funded not fired | Source: Network
Despite these investment companies, new entrepreneurs face a tougher test in the current economic environment, with a large number of startups being slashed in valuations, rising interest rates, weak technology stocks, a market environment that makes investors generally more cautious, and scandals at companies such as WeWork and Theranos that have led investors to investigate more deeply before paying for it.
If the founders can only play beautiful mouths and it is difficult to raise money in the current market, they need to upgrade their strength in all aspects.
Once migrant workers need to adapt to the new identity of the founder, such as how to pitch with investors, how to form their own team, how to balance work and life and other issues have also become new challenges, there are companies such as CoFoundersLab, known as "founder-oriented LinkedIn" companies to help founders find startup partners, provide pitch skills, and form communities for industry elites, but in the end, this identity transformation requires more of the founder's inner strength. But at least the current founders say that even if the road ahead is difficult, doing their own business is more rewarding than being a comfortable migrant worker.
CoFoundersLab | Source: Network
The current wave of layoffs may be a temporary self-correction within the technology circle, perhaps this turning point has made workers completely lose interest in technology factories, or maybe every company is a technology company in this era, traditional industries can finally obtain high-tech talents to increase their own weight, or maybe the next giant will really be born in this crisis...
But as with all crises, some people will see "crisis" at this time, and some people will see "opportunity".
You can sullenly shout that the tech industry is finished for being unemployed, but you can also find your own track, like many people who have already begun to act, and make this layoff a "blessing in knowledge".
Reference source:
- The tech jobs market might not be as shaky as it feels (TechCrunch)
- Where will all the laid-off tech workers go? (Vox）
- Tech layoffs are creating a new era of scrappy (and humbled) founders (TechCrunch)
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