A deep dive into the harsh reality of job loss in the tech industry and its impact on workers and the economy.
On November 4th, 3700 employees of Twitter, which had recently been acquired by Elon Musk, received the message informing them that they had been laid off. With a total workforce of around 7,500 employees, this meant that half of Twitter’s staff was let go that day. This was soon followed by a larger wave of layoffs throughout the tech industry in companies such as Meta, Amazon and Google with many others following suit and reducing their staff.
As the tech industry experiences a shift in market demand, thousands of skilled workers face the harsh reality of layoffs. But what does this mean for the future of the industry and those affected by the job cuts?
The pandemic led to a surge in tech jobs, with sales spiking due to the increased use of online and remote products. Demand for tech workers quickly increased with companies competing against each other to hire talent. This allowed workers to secure lucrative positions with just a few work hours per day. Many people took on multiple jobs and enjoyed corporate perks such as free massages, nap pods and laundry services. The days of unlimited perks, empowered employees and unlimited vacation may be finally on the decline. The government increased interest rates last year in an effort to curb inflation caused by pandemic spending, which led to a slowdown in the economy. These macroeconomic changes in the economy resulted in a decline in the stock market and less demand for products. Executives are now focusing on increasing profit by reducing expenses through layoffs of their workers.
Research shows us that stress created by layoffs takes a toll on physical and mental wellbeing. Professor Jeffrey Pfeffer of the Stanford Graduate School of Business states that, as reported by Stanford News, layoffs can lead to a significant increase in the risk of suicide, with odds being two times or more higher. He adds that layoff doesn’t work to improve company performance. He believes that layoff is the result of imitative behavior and does not have any evidence it works to help the company long term.
One of the issues arising from tech layoffs is the impact on individuals holding a temporary specialty visa known as the H-1B. This visa enables companies in the United States to hire foreign workers for specialized roles requiring expertise in a specific field. If the employment of an H-1B visa is terminated, they will generally lose their right to stay in the U.S. unless they are able to secure employment with a new sponsoring employer in 60 days.
Unfortunately, this kind of frenzied hiring and layoff has affected immigrant like the H1B visa holder families the most. However, some employers like Doordash offer generous deals for immigrant workers by setting the termination data of workers in the future to give people on H1B visas more time to find a new job if they wish to remain in the United States. MVHS business teacher Carl Schmidt was asked if it is ethical for the company to lay off people on immigrant visas as it affects them to a greater extent. “That’s quite frankly unethical but note that corporations have owners, and stockholders, they are the ones who invest their money in the business, and the primary responsibility of the corporation is to [perform for] the shareholders “.
According to levels.fyi, the average salary for an entry-level software engineer is approximately $200k per year in total compensation. The extremely high pay has led to an unprecedented demand for computer science majors in the last few years of college admission. In fact, colleges have seen a 10-fold increase in computer science applicants over the last few years with single-digit admissions rates for the top computer science programs. Although these rates are dismal, some people such as freshman Ronav Dholakia don’t believe that it will change their thoughts on applying for the major. When asked “based on the recent tech layoff, will it affect something about the major you’ll choose in college?”, Dholokia responded “No. It will not affect that. That’s because the major layoffs have no effect on it[my choice].”
Ananya Anand, a freshman at UIUC majoring in computer science and a Monta Vista alumni, is optimistic about technology jobs when asked about the tech layoff and how she plans to prepare for a future career in the technology industry, Anand said, “I am rather upbeat about the technology jobs in spite of the recent layoffs but I also learned a lesson. It is better to be prepared by stashing some savings/emergency cash if you are in this industry and have an alternate stream of income by having a side hustle”. She has observed that, in addition to technology companies, non-technology industries such as healthcare, manufacturing, and the automotive industry are also hiring for technology roles.
As the tech industry grapples with widespread layoffs, it’s important to consider the human cost of these changes and explore ways to support those affected. Whether through retraining programs, job search assistance, or other forms of support, it’s crucial that we work together to ensure a positive and sustainable future for all in the tech industry and support the workforce. For students in schools and colleges considering a career in tech, the recent wave of layoffs serves as a reminder of the ever-changing nature of the industry. But with the right skills and a focus on adaptability, these students can position themselves for success in their future careers. By staying up-to-date on the latest trends and technologies and building a strong foundation of relevant skills, these students can pave their way to a more successful future.