Tech Companies Are Finally Firing Tech Workers
Rani Molla, Vox 1069 Times 534 People

Software engineers made up the biggest portion of tech layoffs in 2023.

At Meta and across tech, software engineer jobs aren’t looking as safe any more. Getty Images

If you were unlucky enough to have lost your job in the last 15 years, someone might have suggested — often unhelpfully — that you “learn to code.” It was shorthand for “do something actually useful that would have kept you from being laid off in the first place.”

That advice is starting to feel even less welcome.

The latest round of layoffs at Facebook parent company Meta is impacting workers in core technical roles like data scientists and software engineers — positions once thought to be beyond reproach. This represents a stark about-face for a company that, until recently, had been offering outrageous salaries and basically hoarding people in these highly sought-after technical positions. And now, as part of the company’s “year of efficiency,” it’s letting some of them go. As Meta founder and CEO Mark Zuckerberg put it, “We’re in a different world.”

The beleaguered social media company is also not alone.

Software engineers were the most overrepresented position in layoffs in 2023, relative to their employment, according to data requested by Vox from workforce data company Revelio Labs. Last year, when major tech layoffs first began, recruiters and customer success specialists experienced the most outsize impact. So far this year, nearly 20 percent of the 170,000 tech company layoffs were software engineers, even though they made up roughly 14 percent of employees at these companies.


Software engineers have made up the biggest portion of tech layoffs in 2023

Software engineers have made up the biggest portion of tech layoffs in 2023

“Early layoffs were dominated by recruiters, which is forgoing future hiring,” Revelio senior economist Reyhan Ayas told Vox. “Whereas in 2023 we see a shift toward more core engineering and software engineering, which signals a change in focus of current business priorities.”

In other words, tech companies aren’t just trimming the fat by firing people who fill out their extensive ecosystem, which ranges from marketers to massage therapists. They’re also, many for the first time, making cuts to the people who build the very products they’re known for, and who enjoyed a sort of revered status since they, like the founders of the companies, were coders. Software engineers are still important, but they don’t have the power they used to

“Before it was just, ‘the more or better, whatever it takes to recruit the best talent,’” said Daniel Keum, an associate professor of management at Columbia University’s business school, said of tech companies. “Now they’re cost-conscious, they want to be optimized and economized.”

He added, “That’s an entirely different mindset. We haven’t seen this before.”

Tech companies grew rapidly during the pandemic, when people were home and their services were needed more than ever, but much of that demand has died down. In the meantime, the tech companies that hugely expanded their head counts in that time failed to come up with the next big thing, meaning they don’t have new sources of massive revenue to pull from and have been forced to switch from growth mode to maintenance. Meanwhile, the economy is not as strong as it was, and Wall Street is telling tech companies that less is more. The rise of AI at work is also a contributing factor, since it allows coders to be more productive, or potentially allows employers to do the same work as before but with fewer workers.

Additionally, Keum said that Elon Musk, who fired 80 percent of his staff but still has a (sort of) functioning product, has become a sort of inspiration for other tech CEOs, who see his extreme cuts as a way of making their more modest ones seem “morally and culturally acceptable.”

Their stance? “‘Thank you, Elon Musk, for showing us that it can be done. And thank you Elon Musk for taking the blame,’” Keum said.

Of course, this might be short-term thinking. While they might save companies some money, ultimately layoffs can be bad for business, lessening morale and productivity and making it harder for companies to grow in the future, when the economy improves. That fact doesn’t seem to be stopping tech companies from joining the layoff bandwagon, whether it’s strictly necessary or not.

For software engineers and other tech workers, however, this doesn’t spell the end of the world. They’re still hugely in demand, but their bargaining power and ability to ask for over-the-top perks and salaries has been muted.

The latest monthly jobs report by tech industry association CompTIA found that even though employment at tech companies (which includes all roles at those companies) declined slightly in March, employment in technical occupations across industry sectors increased by nearly 200,000 positions. So even if tech companies are laying off tech workers, other industries are snatching them up. Unfortunately for software engineers and the like, that means they might also have to follow those industries’ pay schemes. The average software engineer base pay in the US is $90,000, according to PayScale, but can be substantially higher at tech firms like Facebook, where such workers also get bonuses and stock options.

“If you’re a tech person, before, you’d only consider Silicon Valley and top-five firms,” Keum said. “Now, our graduates are thinking about okay, maybe an industrial company. They’re diversifying away from traditional ‘tech tech’ type jobs”

“You have to look a little wider now,” he said.

 

Originally Published On: https://www.vox.com/technology/2023/4/21/23692515/tech-workers-software-engineers-layoffs-meta-coding



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