Tech companies are finally firing tech workers

 If you've been unlucky enough to lose your job in the past 15 years, someone might have suggested – often unhelpfully – that you "learn to code". It was short for "do something actually useful that would keep you from being fired in the first place."

This advice is becoming even less welcome.

The latest round of layoffs at Facebook's parent company Meta is impacting workers in key technical roles such as data scientists and software engineers — positions previously thought to be beyond reproach. This represents a sharp look at a company that, until recently, offered outrageous salaries and essentially stockpiled people in these highly sought-after tech positions. And now, as part of the company's "year of efficiency," it's laying off some of them. As Meta founder and CEO Mark Zuckerberg said, "We're in a different world."

The beleaguered social media company isn't alone either.

Software engineers were the most represented position in layoffs in 2023 relative to their employment, according to data Vox requested from workforce data company Revelio Labs. Last year, when the big technology layoffs first began, recruiters and customer success specialists saw the biggest impact. This year, nearly 20 percent of the 170,000 tech company layoffs were software engineers, even though they made up roughly 14 percent of the workforce at those companies.

"Premature layoffs were dominated by recruiters forgoing future hires," Reyhan Ayas, senior economist at Revelio, told Vox. "While in 2023 we see a shift towards more core engineering and software engineering, signaling a refocusing of current business priorities."

In other words, tech companies aren't just trimming the fat by laying off the people who populate their vast ecosystem, which ranges from marketers to massage therapists. Also, many for the first time, they're making cuts to people who make the very products they're known for and who enjoyed a kind of revered status because they, like the company founders, were coders. Software engineers are still important, but they don't have the power they used to

"Before, it was just 'more or better, whatever it takes to get the best talent,'" Daniel Keum, associate professor of management at Columbia University's business school, said of tech companies. "Now they are cost conscious, they want to be optimized and save."

He added: “It's a completely different way of thinking. We haven't seen this before."

When did mass layoffs become so normal?

Tech companies grew rapidly during the pandemic, when people were at home and their services were needed more than ever, but much of that demand has died down. Meanwhile, tech companies that have significantly expanded their headcount in that time have failed to come up with the next big thing, meaning they have no new sources of massive revenue to draw on and have been forced to shift from growth to maintenance mode. Meanwhile, the economy isn't as strong as it was, and Wall Street is telling tech companies that less is more. The rise of artificial intelligence at work is also a contributing factor, allowing coders to be more productive or potentially allowing employers to do the same work as before but with fewer workers.

In addition, Keum said that Elon Musk, who laid off 80 percent of his staff but still has (some) working product, has become something of an inspiration for other tech CEOs who see his extreme cuts as a way to humble themselves. appear to be "morally and culturally acceptable".

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

Of course, this may be short-term thinking. While they may save companies some money, ultimately layoffs can be bad for business, lowering 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 train, whether it's absolutely necessary or not.

However, this is not the end of the world for software engineers and other technical workers. They are still in high demand, but their bargaining power and ability to ask for superior benefits and salaries has been dampened.

CompTIA's latest monthly jobs report found that while employment at technology companies (which includes all roles at those companies) fell slightly in March, employment in technical occupations across industry sectors rose by nearly 200,000 positions. So even as tech companies lay off tech workers, other industries are snapping them up. Unfortunately for software engineers and the like, this means that they may also have to follow the salary patterns of those industries. The average base salary for a software engineer in the U.S. is $90,000, according to PayScale, but it can be significantly higher at tech firms like Facebook, where these workers also receive bonuses and stock options.

"If you're a tech person, before you would only consider Silicon Valley and the top five companies," Keum said. "Now our graduates are thinking about a good, possibly industrial company. They are diversifying away from traditional 'tech' jobs"