Nitesh Donti, a tech worker, was suddenly and unexpectedly laid off. He had previously posted his excitement about his new position as an engineering manager at the robot vehicle startup Nuro on LinkedIn less than a year ago. Then, in November, Nuro cut 20% of its employees, firing Donti and roughly 300 other employees. Donti, 30, from San Francisco, who had worked as a software engineer at Google for five years before joining the Nuro team in Mountain View, said, “It was a complete shock.” He was one of the thousands of tech professionals who have been fired by their employers since October as a result of poor revenue growth, rising inflation and interest rates, and concerns about an impending recession.
The year 2022 has been a difficult one for the techies out there. And that’s primarily due to the economic conditions that led to layoffs in the tech industry. Most top tech companies, including Twitter, Meta, Apple, among many others, have laid off hundreds and thousands of employees in the last year.
The major layoffs by tech companies this year alone have surpassed the levels from that of the Great Recession the world went through in 2008-2009. In 2008, tech companies laid off about 65,000 employees, and a similar number of workers lost their livelihoods in 2009. As a demand boom during the pandemic rapidly turns into a bust, tech companies shed more than 150,000 workers in 2022, according to tracking site Layoffs.
Not just Californian developers earning six figures are being affected. As outsourcing companies that depend on Silicon Valley clients start cutting their workforces to stay afloat, tech employees in regions of the developing world earning just a few dollars per day are also losing their jobs. This is also a reflection of how globally integrated the digital sector has become. Many make a small fraction of what their American colleagues do, and some worry that the slowdown in the IT sector would force them into poverty.
Recent events also suggest that underrepresented employees are being disproportionately affected. For example, two women who lost their jobs at Twitter are filing a lawsuit claiming the company disproportionately targeted female employees for cuts. The lawsuit accuses Twitter of laying off 57% of its female workers, compared with 47% of men. With regards to engineering roles, the lawsuit claimed 63% of women lost their jobs, compared to 48% of men.
This significant round of layoffs is intended to fix a prior error.
Our online lives ended up being our only activities during the pandemic years. We were all compelled to stay at home, which resulted in more internet time. Online shopping has turned into the only retail outlet, not merely a growing one. Not only have Netflix, Amazon Prime, and countless other streaming services replaced movies, but also dining out, lunch breaks at work, and dating nights. Despite the instability in the world, this spike in online activity was beneficial for tech firms. They brought in record amounts of capital, which led to record profits and an upsurge in hiring. This led tech companies to hire too many individuals. And these are highly skilled software engineers and developers earning low to mid-six-figure salaries, not part-time administrative assistants making $10 an hour.
If tech’s growth prospects were strong, this situation wouldn’t necessarily be of great concern. Even If they’ve just hired them a little bit too early, hiring too many individuals isn’t a problem. The problem is that the near future doesn’t appear to be very promising. It has been reported for several months that the US is presumably entering a recession. Fewer consumer purchasing and, more significantly, for many internet companies, lower advertising spending would both result from a recession. Tech companies must limit their investment in light of these impending challenges in order to survive the uncertain period without mishap.
According to data from layoffs, early 2023 could be harsher for those working in the tech sector. In 2023, traditional sectors that are modernising their legacy stacks and adopting cloud-native technologies may present the greatest potential rather than only major tech corporations. It is also expected to come from startups, particularly young businesses started by former workers of major talent hoarders like Amazon, Meta, Salesforce, Twitter, and others. It’s conceivable that some of the greatest discoveries of 2022, like Open AI’s ChatGPT, will inspire the development of entire ecosystems of related products and businesses.
Tech workers have enjoyed an advantage in the labour market for the sector for years, commanding large salaries and expensive benefits while slogging their way up big tech ranks to the point of bloat. Therefore, a severe restructuring was required. The tech sector has provided very few ground-breaking services over the past five to ten years as it has prospered off of outdated business practices. To the detriment of startups, they have also behaved like enormous squids, suckling up all the talent in the industry. When a payments giant offered more than $450,000 a year for the job, it was practically difficult for a startup business to compete for senior engineers. This layoff will now make it easier for companies to hire the engineers they require. It would not only simplify the hiring process for companies, but it would also inspire creative engineers to develop their own ideas.
Nic Szerman lost his job at Meta Platforms in November, just two months after joining full-time, falling victim to a sweeping 13 percent reduction of its workforce as the advertising market cratered.
Days later, he was back working, seeking investment for his own company Nulink, a blockchain-based payment company, and sent pitches to startup accelerator Y Combinator and Andreessen Horowitz’s cryptocurrency fund.
“As counterintuitive as it may sound, this layoff left me in a really good position,” the 24-year-old said. “Because I don’t have to pay back the sign-on bonus, I get four months of pay, and now I have time to focus on my own project.”
Szerman is part of a wave of ‘would-be entrepreneurs’. These aspiring entrepreneurs have emerged from the ashes of the mass job losses in Silicon Valley in the second half of 2022. As it has been seen in history again and again that from decay begins a new journey. It’s just a matter of time to see if this layoff phase can bring about a drastic change in big tech ecosystem in the 20’s decade.
Author- Muhammad Mujtaba
