Digital transformation concept. Binary code. AI (Artificial Intelligence).
“A rising tide,” they say, “lifts all ships.”
Perhaps not always.
In the full year of 2022, a great year overall for the job market, 1,054 companies in the tech sector registered 164,411 layoffs (Source: layoffs.com, which monitors tech companies).
By tax day of this year, April 15, that number already was blown out of the water, with 586 tech companies reporting 170,549 layoffs. So not only have we seen an explosion in tech sector layoffs, the average number of layoffs per company went from 156 to 291 – and that’s not yet including Meta CEO Mark Zuckerberg’s announcement of two upcoming rounds of layoffs to the tune of 21,000 workers – plus a withdrawal of 5,000 open jobs (Source: New York Times, April 12). Total damages, Meta alone: 26,000. And we’ve also seen what Elon Musk is capable of. More to come; count on it.
Earlier this year, I wrote in an essay in another publication – “11 Things I’ll Be Watching Closely This Year” – that #3 was tech layoffs. I simply said, “Watch out. The big boys are cranking up.”
Sure enough.
As if this weren’t dramatic enough, in the first three months of 2023, the overall economy created 1.216 million jobs, sustaining its 27-month run of 12.5 million jobs in the most stupendous post-recession comeback in history. Not only has that never been done before; it’s never even been dreamed of before. But the tech sector is down, and not by a little bit. What’s going on?
In a Zoom interview with me in February, Cherena Walker, executive director of the career center at Stevens Institute of Technology in Hoboken, New Jersey explained, “During Covid-19, tech had a hiring boom with significant demand, and Crypto was a part of it. It appears there was over-hiring and now there’s an adjusting to the new demand.”
Well, if that isn’t the understatement of the year! And, from my vantage point, we’re nowhere near done. So, with these dismal prospects, that brings up some basic questions: Exactly where in the tech sector were all those jobs lost? Why did you go into tech? Why did you major in or get certified in Information Technology or Computer Science to begin with?
What I’ve found in my independent career coaching practice is that the two most prevalent answers are: (1) It’s well paid, and (2) It’s cool. If you’ll forgive me, now you can add formerly well paid and not as cool as you thought. There are many reasons to go into a field, including IT, but those two shouldn’t be #1 and #2. Something else needs to matter.
Six months ago, I launched a program called “Coach on Call” whereby clients have access to my coaching whenever they need it, employed or not.
Initial observations of the career planning aspect, participants overwhelmingly responded to the “What do you really want to do with your life?” question with answers that indicated direct or indirect awareness that what mattered to them was something in addition to IT – for example, health care or public service or management consulting or urban planning. In short, they realized they were interested in things that were more customer-facing, attached to some sort of global issue, or areas where IT played more of an integral part of the development of other technologies (clean energy, for one).
Although there has been no correlation study here, it seems certain that being in tech for tech’s sake (a) just doesn’t cut it anymore, and (b) was (still is) vulnerable – and, as a result, so were the people who held those jobs. The note of optimism here is that their formidable IT skills could help get them to those newly-defined career paths. In other words and in simple terms, doing IT in a field that’s not primarily IT.
That’s existential and particularly apt in light of the tidal wave of tech sector layoffs that is not going to end soon.
Being in tech just for the sake of being in tech can be highly lucrative, for sure, but the data show the risk. Tech’s loss of 170 thousand jobs represents 14% of the jobs created in the same period of time. Stop and think about that for a minute. For every seven jobs created elsewhere, one tech job went up in smoke. Or, shall we say, deleted. Otherwise stated, nearly 1.4 million jobs have been created just in the first three months of this year; it’s just that 170 thousand of them were canceled out as if, on a macro basis, they didn’t happen at all.
Will there be an end to this? Of course, but not soon. That adjusting that Cherena Walker talked about is obviously still in progress.
The tide is still rising but apparently there are still ships not rising with it.
