Supply chain issues, inflation, and the geopolitical turmoil’s impacts on the U.S. economy are all to blame for the recent layoffs in the technology industry. Reduced revenue has forced prominent leaders in the industry, such as Meta and Amazon, to let go of roughly 219,959 employees in the first week of December alone, according to TrueUp’s tech layoff tracker.
Despite all of this, there is a silver lining for those currently or formerly employed by the tech industry. The recent economic shake-ups have led to opportunities—for both those employed by the technology industry and those outside of it—that might not have been so readily available otherwise. Economic downturns and challenging times create opportunities to find success:
- Traditional firms can capitalize on technological modernization.
The pandemic prompted companies that are still utilizing somewhat archaic methods of automation to realize the versatility and practicality of modern technology, but many have yet to transform their organization entirely. Leaders who decide to take the leap to immerse themselves into the new era of electronically accessible business now have access to hiring some of the most talented employees in the industry.
Before the tech industry’s recession, young and ambitious software engineers might have been more inclined to work for a startup organization on the brink of developing state-of-the-art platforms. With tech companies reducing staff, established organizations can outcompete startups in attracting tech talent. Any company with sound fundamentals and knowledge of general business principles can transition its organization with the help of leaders in tech development. Tech industry employees have skills that are immensely valuable not only to a company’s digital transformation but also to predict and quickly adapt to a changing economy.
- There is still a need for tech workers.
When COVID-19 began, the world moved inside and, subsequently, online. As the economy emerges from the holds of the pandemic, some virtual business leaders who were thought to be here to stay are proving to be transient. Young startup companies or those bound to online advertising spending are not seeing the revenue and success they had anticipated at the height of an online economy. Although showing promise to investors, these companies ran on tight margins and lacked the cash reserves to endure challenges. According to Public Knowledge, there were roughly 7,000 tech startup layoffs between March and April 2020. In fact, Meta CEO Mark Zuckerberg wrote in a message to employees regarding recent layoffs, “At the start of COVID, the world rapidly moved online, and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended…Unfortunately, this did not play out the way I expected.” The simple fact of this misprediction is that individuals employed by the tech industry are still feeling the effects of this, even two years later. A CrunchBase news tally study found that roughly 91,000 U.S. tech sector employees were laid off in 2022. Some of the largest cuts came from notable companies in the technology industry, such as Meta and Redfin.
That being said, traditional companies not centered around technology still need a technology department, which is helping to keep the unemployment level for this industry stable. In August of 2022, the unemployment rate for tech occupations in the U.S. was 2.3 percent, according to the U.S. Bureau of Labor Statistics. This statistic is lower than the total U.S. unemployment rate of 3.7 percent that month, which is itself low by historical standards. Moreover, a Dice study found that despite these layoffs, nearly 375,000 tech positions remained unfilled in December of 2022, an increase of almost 25 percent compared to the same period in 2021. These openings were in the tech sector of healthcare, finance, and insurance companies. To that same end, jobs including cybersecurity, cloud operations, and data science and analytics continue to be in demand as organizations with remote or hybrid workplaces “require distributed and secure networks,” according to the tech insight firm. And, as tech companies lay off workers, there is now an opportunity to poach invaluable employees, especially those employed on a visa who need a quick rehire to stay in the United States.
The positive reality of working in tech is that you can be employed by a technology-based company or by a technology department in an industry entirely outside of tech.
- It could be an opportune time to acquire struggling tech companies.
As previously mentioned, those once promising COVID-19 startups do not have to go under completely. Many of these organizations were thought leaders of valuable and incredibly useful inventions yet lacked the financial, marketing, or production resources to see true success. Now is an opportune time to acquire these companies, allowing their mission and vision to live on.
Apple is a perfect example of a company taking advantage of the value that struggling startups can bring. Between March and September 2020, Apple acquired seven companies and purchased eight, including weather app DarkSky, speech recognition startup Voysis, and VR event streaming company NextVR, according to CBInsights. Similarly, Microsoft made seven purchases in the same timeline, focusing mainly on developing cloud service and IT software development companies. By Q3 of 2021, according to GlobalData, the global merger and acquisition value came close to $1 trillion from the tech, media, and telecommunication industries alone. These merges have continued into 2022. In May of this year, Google acquired microLED startup Raxium. The startup specializes in developing microLED display technologies for wearables and augmented and virtual reality (AR and VR) headsets. Google VP of Devices and Services, Rick Osterloh, felt that “Raxium’s technical expertise in this area will play a key role as we [Google] continue to invest in our hardware efforts.”
While some of the statistics might seem stress-inducing for those entering or currently employed by the tech industry, it is essential to remember that significant layoffs often stem from a worst-case scenario. Nolan Church, CEO of consulting firm Continuum, stated that large-volume layoffs do not always depict an accurate representation of the industry’s success, but the economy’s success. The recent period of layoffs is merely that, a period. In fact, SHRM reports that 79 percent of laid-off tech workers already found a new job within three months of starting their job search, and 40 percent in less than a month.
This blog was written by Broadleaf’s Vice President of Client Delivery Joseph O’Shea.