Since the beginning of 2023, 18 companies based in San Francisco have laid off nearly 12,000 employees. Across the nation, nearly 80,000 tech workers, especially those in sales, product design, and data science and analytics, have lost their jobs in the past several months. Companies across the board have announced layoffs including major tech juggernauts like Amazon, Google, and Twitter.
The layoffs are occuring amid sluggish economic growth, and increased interest rates to combat inflation. This has raised speculations about a U.S. recession after figures from the U.S. Bureau of Economic Analysis revealed that the gross domestic product shrank in July 2022 for the second consecutive quarter.
That shrinking is an inverse to the growth seen during the pandemic. The usage of technology notably increased during the peak of lockdown as life and business shifted online. As a result of increased online activity, tech companies saw record-high earnings, sparking a recruiting frenzy to meet the temporary demand.
This anomaly did not last and contributed to the massive layoffs employees are experiencing today. Female tech workers made up 56% of the employees that were let go despite only comprising 17% of tech jobs, according to data gathered by 365 Data Science.
Statistics like these are shaking the confidence of students entering the workforce. “It’s not the best time to be in tech right now. I’m graduating in spring 2023 and am quite worried about being released into the job market,” fourth-year computer science major Lukjan Li said.
For international students, a more downsized job market means positions offering work sponsorship are harder to find. “I have to specifically shortlist companies that can afford to file a petition for H1-B visa, and the bad news is that they’re usually large companies,” fourth-year international student Anil Bahadkar said.
The recent pattern of tech layoffs is a sharp contrast to the growth of industry that Generation Z has witnessed in their lifetime. However the older generation distinguishes this moment in the economy as different from past economic downturns.
In an interview with the New York Times, Senior Vice President of the career transition firm Challenger, Gray & Christmas, Andy Challenger said, “We’re seeing the hiring mania of the pandemic being corrected for — not the popping of a bubble.”
While the oversaturation is balanced out, tech workers are not facing the high unemployment rates of previous recessions that reached more than 6%. Current unemployment rates are below 2% according to Forbes.
According to a 2022 survey from ZipRecruiter, an employment platform,“nearly 80% of laid-off tech workers found new roles within three months of beginning their job search.”
Similarly, Alex Hochman, senior director of career services at USF, told the Foghorn that these layoffs shouldn’t worry students. “[Layoffs] affect the middle-aged tech person, but not really students or young talent,” he said.
“College hiring is still going on because at the end of the day, you can get a lot of productivity for cheaper from a college student than someone who has been at a company for many years,” said Hochman. “I’ve seen trends like this before in tech, and students stayed in tech.”