The creator of Layoffs.fyi expects more job cuts—when it’s slow going
The tech sector started the new year on shaky ground just as last year left: 150,000 tech workers lost their jobs in 2022, more than half of which occurred in November and December alone, according to Layoffs.fyi. More than 18,000 tech workers were laid off in the first half of January from major players such as Amazon and Salesforce.
More big layoffs are likely on the way, says Roger Lee, San Francisco-based creator of Layoffs.fyi and founder of Human Resources Technology. He began tracking tech layoffs in March 2020 in part to connect unemployed workers with hiring managers at companies still growing during the pandemic.
Despite the recent deluge of layoffs, Lee says there is some hope that the current wave of layoffs will slow. The latest wave of tech layoffs, Lee says, began in the spring of 2022, just as the Federal Reserve began its series of blistering attacks. raise interest rates.
“There is a clear correlation between the Fed raising interest rates and laying off these tech companies,” Lee says. This is because when interest rates rise, it becomes more expensive for companies to borrow money and grow their business. Several tech leaders, including Amazon’s Meta Mark Zuckerberg and Andy Jassy, say the new layoffs are a result of overemployment in the past two years.
But, Lee says, “As of now, the Fed is expected to slow the pace of interest rate increases, and many believe that by the end of this year, they will pause raising rates and perhaps start lowering them.” When that happens, it’s likely by half. The second of 2023, “I expect this wave of tech layoffs to eventually subside, too,” Lee says.
It is important to remember that the the labor market in general Too strong, and tech workers who have lost their jobs are quickly hired. As of November, the layoff rate was less than 1% of the workforce, and there were 1.7 jobs per worker available, according to Labor Department data.
“There are still many companies that are hiring, and there are a lot more jobs that are being laid off, so there is reason for optimism for people who have been laid off recently,” Lee says.
How to find work in a layoff environment
With layoffs ahead, Lee says it’s important to research how stable a potential employer is.
First, you’ll want to know what the company’s current business priority is—are you rehiring, expanding, or launching something new? What do they prioritize and what do they not prioritize?
Next, ensure that your expertise aligns with the company’s priorities and core business strategy for the time being.
If it’s a public company, Lee suggests looking at its earnings to get a sense of whether it’s profitable or on its way. This kind of information is hard to find for private companies, so you might ask the recruiter directly: Is the company profitable? If not, how much cash runway does he have?
You can also address the elephant in the room: How is the company prepared to deal with a potential downturn, and how exactly does this play a role in that?
It’s also worth asking if the company has laid off workers before. If so, what was the reason, and how did they send it? How did they deal with departing employees? How did leaders consider the impact on morale and productivity of those left behind?
“People are more sensitive to this now,” he tells me. “Understanding the company’s past procedures can give job seekers an idea of how the company made decisions and how to handle their employees during the process.”
Also, remember that while there have been some patterns in layoffs recently, not every company is focused on cutting costs in the same way. For example, Lee says, “While one company may lay off its advertising division, because it is focusing less on advertising revenue, a different company may actually be investing quite aggressively in advertising.”
Finally, Lee recommends checking to see if the company lists wages in their job postings and any other information about their pay philosophy online.
A handful of states and cities, including California, New York City, Washington and Colorado legally require employers to include salary ranges on their job listings. And Lee’s new site Comprehensive.io is a database of Open technology jobs and wages listed in one place.
Lee says job seekers can use this information to understand their overall market value and where they can reach a particular employer. In addition to potential salaries, he adds, a company’s salary information “can be an indication of what you value, both in terms of fairly compensating employees, but also in terms of their approach to transparency with employees in general.”
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