Tech Layoffs
Being laid off can be devastating, but it’s also an opportunity to move your career forward in a different direction.
The tech industry has always been a fast-paced, ever-changing world, but lately, everything is moving at breakneck speeds. During the pandemic, the tech industry boomed. People stayed at home and relied on technology more than ever, leading to massive gains and growth for tech companies.
However, all good things must end, and when the hypergrowth that many companies experienced during the pandemic stopped, a flood of layoffs arrived. In 2022, everyone from Netflix to Twitter to Meta has let go of workers — and not just a few here and there. Robinhood cut 9% of its workforce in April and then 23% of its remaining staff in August, while Twitter cut around half its staff.
As of December 9th, over 90,000 workers in the U.S. tech sector have been laid off in 2022 alone. It seems like every time you turn on the news or open your social media, there’s chatter of a new tech layoff!
What’s Behind All The Tech Layoffs?
So, if tech companies were thriving in 2020, what exactly is behind this wave of tech layoffs? As you might expect, there’s no singular cause behind the tech layoffs.
In some cases, layoffs may be due to a change in power. Look at Twitter as an example. Elon Musk took over and promptly cut around 3,700 jobs. Musk said Twitter was losing up to $4 million daily, and he had “no choice” but to lay off around half of Twitter’s employees.
For many businesses, inflation is to blame. Robinhood cut 31% of its workforce due to the crypto market crash and the fact that inflation is at 40-year highs. Tightening consumer budgets have impacted PC and laptop sales, leading to HP planning to cut thousands of positions by 2025.
Many tech companies have also experienced a post-pandemic growth deceleration. Snap was down by more than 80% with a much lower year-over-year revenue growth rate than expected, so the company laid off 20% of its workforce — and they’re hardly unique. Stripe lowered its internal valuation by $21 billion over the last year and laid off around 1,100 people, while Shopify CEO Tobi Lutke said he misjudged how long the pandemic e-commerce boom would last. So, when the company’s stock price dropped a massive 78% in 2022, Shopify laid off 10% of its global employees. Similarly, Meta cut around 11,000 jobs after expanding its headcount by approximately 60% during the pandemic, losing $9.4 billion to the Reality Labs Division’s work with the metaverse, and seeing its stock at its lowest since 2016.
Other tech companies have laid employees off for fear of an upcoming recession. For example, Lyft cut 13% of its workforce and cited a probable recession in the next year and rising rideshare insurance costs as the main drivers behind the layoffs. Similarly, Coinbase eliminated 18% of its full-time positions, with CEO Brian Armstrong naming a possible recession, the loss of more than 80% of Coinbase’s value, and extremely fast growth during the bull market as reasons behind this difficult decision.
Essentially, tech companies have quickly shifted from the growth mindset they were in during the pandemic to a more cautious one that reflects the economic uncertainty in the industry and across the world.
What Are The Implications Of Tech Layoffs?
The flurry of tech layoffs has had significant impacts, especially on individuals. People have been left without jobs in a period of economic uncertainty, extremely high rents, and surging mortgage rates. Now, they’re left to compete with all the other unemployed tech professionals for a limited number of positions.
However, if you lost your job in a tech layoff, there is a silver lining. This is a great time to explore other career options. While working for a tech giant has plenty of benefits, consider taking a chance on a smaller organization.
Why? For one, big tech companies are generally less innovative than small and medium-sized businesses (SMBs). After all, today’s big tech companies have already found a profitable service, software, or product, so they’re focused on growing their business. Instead of dedicating all their resources toward creating new products, big tech companies need to focus on managing employees and developing existing products.
On the other hand, SMBs prioritize innovation and are ready to hire inventors and out-of-the-box thinkers. If your next job is at an SMB rather than an established tech giant, you can exercise your creativity and take bigger risks. Instead of being one cog in a massive machine, you’ll have a much larger impact on the company from the get-go and can grow as your company grows.
Plus, you won’t necessarily be looking at a massive pay cut. Sure, the Googles and Facebooks of the world have billions of dollars in annual revenue, but that doesn’t mean SMBs don’t also offer reasonable compensation. After all, the government provides innovative companies with incentives like significant capital and the Research and Development Tax Credit to cover innovative employees’ salaries. Additionally, some SMBs offer stock options and equity so you can share in your company’s success. If your company takes off, you could become very rich very quickly.
What’s more, SMBs typically offer a better work-life balance than bigger-name tech enterprises. SMBs see employees as individuals rather than one of thousands, so they’re generally more reasonable regarding work-life balance. After all, no one innovates at their best when they’re short on sleep, skipping lunch, and haven’t taken a vacation in three years.
The rise of managed services is creating exciting opportunities for tech professionals. As a managed services professional, you’ll never be bored. You may find yourself securing networks and devices to combat cyberattacks. On other days, you could install the technology needed to protect schools from physical and cyber threats, work with smart cameras, prepare a government agency’s network for WiFi 6E, or even help provide esports teams with the bandwidth they need to succeed.
If you work for a managed services SMB, you’ll also have the best of both worlds: excellent job security, good benefits, and the ability to make a significant impact. Essentially, you’ll go from being a small, expendable fish in a big pond to big fish in a small pond. When you start a career in managed services and join an SMB, you’ll be seen as an individual and can begin making ripples quickly.
Make A Difference At TTI
The recent tech layoffs have rocked the industry and been quite jarring, but there are still plenty of opportunities. If you’re looking to work in managed services for an SMB where you can receive a competitive salary, have fantastic health and dental benefits, advance in your career, and make a big difference, check out Turn-key Technologies, Inc. (TTI).
TTI helps organizations create digital ecosystems and offers IT solutions and managed services. We handle everything from installing structured cabling to providing cybersecurity solutions. We’re also hiring and would love to welcome new, innovative tech professionals to our team of experts. See our available career opportunities today!