How Tech Industry Layoffs Are Impacting Developers
The tech industry has been battered by a brutal series of layoffs over the last two years, with Google, Microsoft, Amazon, SAP and Salesforce among the tech companies doing staff cuts. There’s also no sign that layoffs in the tech industry will let up this year, with layoffs.fyi reporting that 204 tech companies have already laid off 49,978 employees so far in 2024 (data current as of March 12th, 2024.) Recently unemployed workers are also finding themselves reading news headlines that show many tech companies making record profits, with Microsoft, Apple, Google and others seeing increasing revenue while simultaneously laying off staff.
While these stats include a wide breadth of roles at the aforementioned tech companies, layoffs have impacted web, front-end, and mobile app developers.
Why Are So Many Tech Layoffs Happening Now?
While layoffs are never welcome, the recent wave of layoffs in the tech industry has been larger than in recent years. While some of the reasons are well-understood and apply to other industries as well — such as excessive over-hiring during peak Covid periods in 2020-2022 that are now putting intense pressure on CEOs to cut expenses — other factors are contributing to layoffs in the tech industry.
In his conversations with technical recruiters and developers, veteran developer, author and YouTuber Will Iverson sees part of the current bump in layoffs attributable to high-interest rates. “Interest rates have made the cheap money go away… investors often structure term sheets as convertible loans to protect themselves legally, and as the rates go up it becomes much less attractive [for companies] to take investment money,” said Iverson. “Hands-down this is the biggest structural issue across the board.”
Another factor Iverson suggests is the example set by Twitter/X owner Elon Musk, who significantly cut headcount at Twitter when he completed his acquisition of the social media platform in October 2022. “I think a lot of CEOs are looking at that and wondering just how much of their technical staff they could cut and keep things running,” Iverson said. “Maybe not 85%, but [maybe] 10% or 20%?”
The advent of AI is also having an impact, but the extent of that is open to debate. Iverson thinks AI is having a huge psychological impact, but it’s still unclear how much AI is affecting hiring and employment levels, and mentions that the technical recruiters he’s spoken with “…all seem to think that it’s minor compared to the issues related to interest rates.”
Iverson does suggest that AI is having a big impact on a few companies and areas, and encourages developers to approach AI from a fresh perspective. “I would suggest that for most people, instead of using the term AI, they would be better off conceptually using terms like automation. For example, if I use an LLM to help me write some code, how different is that from reading the documentation and writing the code myself?” Iverson said. “Almost everything that AI technology based on machine learning does has to be ok with at best a 98-99% accuracy level. Best case. So in practice right now, that means that for most stuff you have to have a human backstop.”
Tech Layoffs from a Dev Perspective
I reached out to several developers to get some insight into what their layoff experiences have been.
Mathew Simpson is a full-stack senior developer who was laid off from Cypress.io in January of 2023, along with what he suggests was “about 30” of his colleagues. Simpson expressed gratitude for a generous severance package that included several months of pay, and six months of healthcare, as well as giving him his corporate laptop. Since his layoff, Simpson has “applied for literally hundreds of jobs” and expressed frustration about the initial HR screening stage, which is increasingly driven by AI-powered human resources tools.
“We now have a strange loop where AI-generated resumes are being fed into AI hiring tools. Countless thousands of devs who were previously handicapped by either poor English skills or just a general difficulty with human communication can now produce slick, professional resumes, making filtering out the signal from the noise massively harder,” Simpson said.
Simpson believes that AI resume screening is also having a negative impact on many devs who may have experiences and backgrounds that don’t easily slot into a predefined, automated checklist, resulting in an increasing likelihood that promising candidates may get overlooked.
“With a human recruiter I think there is more scope to look at the whole person, give me a chance, and see that what I did thirty years ago is far less relevant than my broad experience since then,” says Simpson. “I’m also a very good one-on-one communicator, but this only gives me an advantage if I can actually reach that stage!”
Michael Chan is a Senior DX Engineer, technical educator, and content creator who was laid off in late February 2024 from Chromatic. In addition to documenting his layoff on his own YouTube channel, Michael agreed to share some of what his layoff experience was like. Chan mentioned that he was laid off abruptly, his recent peer and manager reviews were positive, and that there had been no indication that a layoff was about to happen. “Logging in for a morning meeting I learned that my credentials had been revoked, and I then noticed a missed call from my manager, and concerned texts from my coworkers,” Chan said. “I was given two months severance. Being laid off at the end of the month, my insurance coverage ended quickly, and I was not reimbursed for pending expenses and fringe benefits (gym membership, etc.). Three other employees were impacted, based on the messages and status updates I’ve seen.”
Abrupt, unannounced layoffs are always a shock to employees, and Chan suggested that the “standard practice” approach from HR departments wasn’t an ideal way to treat employees. “I believe that HR standard practice is an inhumane way to lay off teammates that have performed professionally,” Chan said. “I understand the importance of reducing access, but I believe there is room for humanity.”
Layoff experience can vary by individual and by employer, but developers I spoke with (and from my own personal experience) have experienced a wide range of treatment after a layoff. More enlightened employers provide multiple months of severance pay and extended health care coverage, reimbursement for fringe benefit expenses, and often give employees their work laptops — which can often be worth several thousand dollars — to help laid off employees find a new role. In addition, executives at some companies reduced their own salaries after a layoff, tangibly demonstrating their willingness to tighten spending after staff cuts.
At the other end of the spectrum, some employers announce layoffs abruptly, immediately remove employees from internal email and Slack channels, and provide limited severance and other benefits, including requesting the return of work laptops and not reimbursing employees for agreed-to benefits. Given the disparity in treatment that laid-off employees can receive, learning how employers treat laid-off employees should be another factor that job-seekers may want to factor into their search criteria for a new role.
Advice on Finding Your Next Role
With tens of thousands of developers looking for new roles, what are some of the things devs can do to stack the hiring odds in their favor?
Iverson produced a video for experienced Java developers that provides some tips for looking for a new role, and provided some general tips. “At the most basic level, I would suggest that devs be aware of their horizontal (e.g., I’m a developer that works in e-commerce, or finance, etc) and their vertical (e.g., in retail, healthcare, etc.) and use those as pivot points,” said Iverson. “You should also think about how you feel about being in tech if, for example, salaries are stagnant or drop 10-20% a year for the next few years. Or if your role continues to involve more things like cloud dashboards and low-code/no-code tools, and more about reviewing AI-generated code than writing it from scratch. That might affect how you think about your career going forward.”
Building out your network of LinkedIn contacts is always good advice, and looking for online career resources outside of the usual suspects — which include sites like Indeed, Monster, SimplyHired, Google, and the Twitter jobs portal, for example — can help improve your odds. Wellfound, Otta, TopStartups.io, and BreakoutList.com all specialize in offering jobs in tech and at startups, while BuiltIn has a network of regional job portals — like BuiltIn Colorado, for example — that provides a more focused look at job opportunities in a given region, which could be doubly useful as some employers seek to place more role in physical office locations.
In addition to online networking with peers, Brian Rinaldi, the President of Orlando Devs, suggests that job seekers also work to bolster relationships locally as well. “I think the best place to start right now is to work through whatever local groups you can find,” said Rinaldi. “Find a local developer meetup or a local tech organization. These are usually places where jobs get posted that are remote or local, but they are also a low/no cost way to build your network.”
Developer Careers: The Way Forward
With the tech industry going through substantial, foundational changes with the advent of AI and entering a post-Covid economy, developers should embrace the idea of continuous learning and explore the new opportunities offered with the arrival of AI, machine learning, robotics, and other growing technology trends. Chan suggests that how employers and their employees communicate is also something that needs to be addressed as the industry moves forward.“We have a lot to learn if we want to build healthy, productive working relationships. Trust is easily broken, and quickly when we hide behind [HR] ‘standard practice,’” Chan said. “Leaders will have to make hard decisions, but do it with respect: Terminated employment doesn’t have to be a burned bridge.”
Simpson also had encouraging thoughts to share with fellow developers who also might find themselves looking for a new role. “Be clear about what you want to do…and don’t waste energy on roles you know you don’t want. If you have any interest in AI/ML development at all, start doing it now,” said Simpson. “Find a project relevant to your desired role and open-source it. Finish your projects!”
