If the mass layoffs in big tech this past week are any indicator, the glory days of being pampered as a young person in tech are nearing an end. The tech career Gold Rush that took off in the 2000s has influenced generations to study STEM in college, aspiring to easily secure cushy jobs and be babied by extensive benefits and human resource budgets. However, with the pandemic as a catalyst, hiring and spending for a better work environment has begun to plateau.
Leading tech companies such as Meta, Twitter, Amazon, Snap, and many others have come to the realization that their demand for qualified employees and the rate they’re hiring them is not what it was five years ago. Talented applicants are much more abundant and consequently desperate to work and willing to settle for less.
The pandemic highlighted over-hiring as companies scrambled to continue operations while employees had to work from home. Since people are not as productive working from home, more employees were necessary, so hiring rates only increased. Now that COVID has cleared up, these companies are left with more employees than needed, all with six figure salaries and diluted duties. What initially began as the plateau in hiring rates, became large scale layoffs across the industry. Facebook and Instagram parent company Meta layed off 13% of its employees which makes up around 11,000 people. Snap announced that they plan on laying off 25% of their employees. All together over 120,000 tech employees have lost their jobs in the past year(npr).
The motive for these layoffs was to optimize profits; paying someone a six figure salary to sit around half of the day is not at all sustainable. Tech companies are also realizing that, thanks to the growing competition among potential employees, they can save a lot of money by making their employees work for a living, and stressing them out a little more.
In the beginning of the career rush, tech companies competed to attract and maintain top talent in tech. For example, Facebook opened its headquarters campus in 2012, which is like Disneyland for young nerds complete with restaurants, arcades, catered food halls, coffee bars, outdoor lounges, a rooftop nature walk path, art galleries, among many other amenities. With the amenities come the promise of a lenient work environment where mental health, PTO, and a healthy workplace are top priorities. This way, once a talented software engineer settles at Facebook, they wouldn’t even think of leaving.
About a decade later, the talent at these companies are more disposable given that their skilled positions became much more competitive to fill. Between 2006 and 2015, the percentage of undergraduates in STEM increased by a hefty 12%. Like millions of others, I am a college student that almost blindly chose to study STEM because of the promise of abundant high paying jobs in lenient work environments without thinking about the inevitable hault in industry growth. Every year it becomes increasingly difficult to land a desirable job for tech students and recently, some have lost their dream jobs after just a few months due to the layoffs.
Also, because companies have to put much less effort into recruiting and satisfying current employees given the sheer amount of qualified applicants for job positions, they have less need for human resources. As a result, human resource divisions have been hit just as hard as the engineers during the layoffs. Amazon and Twitter, companies owned by the two richest men in the world, are under fire for getting rid of nearly half of their HR teams. As businessmen, Musk and Bezos seek to maximize the money they make while minimizing the money they spend, but cutting a big chuck out of human resources begs the question of how well the companies can operate with these losses.
“Once [employee-management] relations, trust and respect are diminished or destroyed, it’s very tough to re-establish them” says Charles Krugel, a management-side labor and employment lawyer and HR counselor based in Chicago. A healthy company where everyone is on board is intuitively a more successful company, and tech guys hate being treated as pawns by Billionaires that were once in their position(HRE). It is quite unheard of for tech brats to be undervalued and exploited by their employers the way blue-collar workers and teachers have been for centuries; you never hear of software engineer unions. But soon enough organization and protest among high salary tech workers may become a real thing.
While it’s been rainbows and butterflies for us engineers for the past couple of decades, becoming a software developer in the past few years isn’t that special. The luxury of swinging from job to job collecting signing bonuses with ease and receiving additional PTO because of your midlife crisis is hurting your feelings will soon be a thing of the past. The trajectory of big tech that mass layoffs imply will likely arrive at less desirable work environments and pay unless caught early by emerging tech union organizations. Good things don’t last forever, but with unemployed, yet motivated geniuses wandering around, tech applications have a bright and creative future.
It is kind of sad how little personal decisions matters as the societal trend changes. Studying STEM seemed like a great idea when i was getting into college. It was still a great idea last year when my friends are getting six figures jobs in big tech companies. The change in this year came so fast it is hard to react. However, this also means things could change for the better any minute, so there is still hope for a better future.
It is definitely unsettling, especially as a student in STEM, to hear about all the layoffs happening. It seems similar to what science-fiction warns us about, creating robots that can take over our jobs. Instead, in this situation it is writing code good enough that the company doesn’t need to keep you around to fix it, although of course that is not the case in every layoff. As you mention at the end, I do think breaking off of mainstream tech will allow a lot of new innovation and creativity, which hopefully opens up more jobs and contributes cool and useful things to society.