According to Layoffs.fyi, the tech sector is starting the new year as shaky as it left the last year: 150,000 tech workers lost their jobs in 2022, more than half of which happened in November and December alone. More than 18,000 tech workers from major players like Amazon and Salesforce were laid off in the first half of January.
More big layoffs are on the way, says Roger Lee, founder of layoffs.fyi and a San Francisco-based HR technology developer. It began tracking tech layoffs in March 2020 to connect unemployed workers with hiring managers at companies still growing through the pandemic.
Despite the recent flood of layoffs, Lee says there is hope that the current wave of layoffs will slow. Lee says the latest wave of tech layoffs could begin in the spring of 2022, when the Federal Reserve begins a series of aggressive rate hikes.
“There’s a clear correlation between the Fed raising interest rates and these tech companies laying off,” Lee said. Because when interest rates rise, it costs more for companies to borrow money and grow their businesses. Many tech leaders, including Meta’s Mark Zuckerberg and Amazon’s Andy Jassy, say the new layoffs are the result of over-hiring over the past two years.
But Lee says, “For now, the Fed is expected to slow the pace of interest rate hikes, and many believe they will stop raising rates and possibly start lowering them by the end of this year. ” When that happens, potentially by the second half of 2023, “I expect the tech layoff inflation will also eventually subside,” Lee said.
It’s important to remember that the overall job market is quite strong, and tech workers who lose their jobs are quickly rehired. As of November, the layoff rate was below 1% of the workforce, with 1.7 jobs for every available worker, according to Labor Department data.
“There are still a lot of companies hiring and more jobs than layoffs, so there’s reason to be optimistic for people who have been laid off recently,” Lee said.
How to look for a job in a layoff environment
Regarding layoffs, Lee says it’s important to investigate a potential employer’s stability.
First, you want to understand what the company’s current business priority is—are they reorganizing, scaling, or launching something new? What do they prefer and prioritize?
Then make sure your experience is currently aligned with the company’s priorities and core business strategy.
If it’s a public company, Lee suggests looking at their earnings to see if they’re profitable. This kind of information is more difficult to find for private companies, so you can ask the employer directly: Is the company profitable? If not, how much money does he have?
You can also address the elephant in the room: How is the company prepared to deal with a potential downturn, and how does this role in particular affect that?
It’s also worth asking if the company has made layoffs before. If so, what was the reason and how did they send it? How did they treat employees who quit? How did leaders rate the impact on laggard morale and productivity?
“People are more sensitive to it now,” Lee says. “Understanding a company’s past performance can give job seekers insight into how the company makes decisions and treats its employees during that process.”
Also keep in mind that while there are some patterns in recent layoffs, not every company focuses on cutting costs in the same way. For example, Lee says, “one company may cut its advertising division because it’s less focused on advertising revenue, while another may actually invest very aggressively in advertising.”
Finally, Lee recommends checking to see if a company lists their fees and any other information about their online payment philosophy in job postings.
Several states and cities, including California, New York, Washington, and Colorado, legally require employers to include salary ranges in job listings. And Lee’s new website Comprehensive.io is a database of open tech jobs and salaries listed in one place.
Lee says job seekers can use this information to understand overall market value and whether they can connect with a specific employer. In addition to salary potential, he adds, a company’s salary data “can be a signal of what they value, both in terms of fairly compensating employees and in terms of their approach to transparency with employees in general.”
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