Being let go from a job is hard, especially at a moment when the cost of living is rising and a recession is looming. This Thanksgiving, tens of thousands of recently laid-off tech workers will be asking themselves: “What’s my next career move?”
Tech companies are facing strong headwinds. More than 59,000 people in the industry have been laid off so far this year, according to data compiled for MarketWatch earlier this month by Challenger, Gray & Christmas.
In early November, Tesla founder
Elon Musk fired 7,500 Twitter staff members — nearly 50% of its global workforce — just days after taking over the social-media company in a $44 billion deal.
The following week, Facebook’s parent Meta
announced it would lay off 11,000 employees, equivalent to 13% of the social-media company’s employee base. And this week, Amazon
said it plans to lay off 10,000 workers, or about 3% of its white-collar employees, and signaled that there may be more cuts next year.
“Tech companies are feeling strong headwinds. More than 59,000 people in the industry have been laid off so far this year.”
— Challenger, Gray & Christmas
With inflation at 7.7% in October compared with a year ago — only slightly lower than the 40-year-high of 8.2% recorded in September — it’s becoming increasingly hard for consumers, and especially for people who’ve lost jobs, to make ends meet.
The Federal Reserve has raised rates six times so far this year. While that helps combat the rise in the cost of living, it also makes it more difficult for tech companies to deliver growth at the same momentum as in previous years.
High interest rates have made borrowing more expensive, and a strong dollar reduces the value of revenue from foreign markets. Those Fed rate hikes have also pushed the short-term borrowing rate to a target range of 3.75% to 4%, making everything from car loans to credit-card debt more expensive.
And in fact, the decline in tech hiring began around June — at the same time the Fed started raising interest rates, according to job-search engine ZipRecruiter.com.
But there is good news: The overall job market is still strong and, in some sectors, labor shortages persist.
Time for a reset
If you’ve lost a job in recent months, you’ll have to face the fact that it might be hard to find a new job at the same level and for the same pay as your old one, said Renata Dionello, chief people officer at ZipRecruiter.
As difficult as this realization might be, Dionello suggests looking at it as an opportunity.
“Remember this period is a period of reinvention, a period of discovery and a period of reconnecting with a bunch of people,” Dionello told MarketWatch.
And if you’re fortunate enough to have a healthy severance package, you’ll have more time to pause and think about your long-term career goals, she said.
Consider alternative sectors
The U.S. economy gained 261,000 new jobs in October, underscoring the persistent strength of the labor market. There are jobs out there, so keep your skills fresh and think about developing new ones, Dionello said.
Scoring a job in tech that’s similar to the one you had could take longer, and you will likely face stiff competition, said Aaron Terrazas, chief economist at Glassdoor. The recent layoffs released a lot of talented individuals into the job pool at the same time.
Think about other sectors that require people who are proficient in software and other tech skills, which include healthcare, government and education, said Julia Pollak, chief economist at ZipRecruiter.
Healthcare has a huge need for people who can develop apps and implement telehealth services, she said. Governments are always hungry for tech-savvy workers but have traditionally had difficulty competing with the private sector. Schools, too, need to improve digital resources for students, she added.
Salary is not everything
It’s not always about salary, especially during such an uncertain time. Health insurance, paid time off, 401(k) plans and work-life balance issues such as remote or hybrid work may also play a role in your decision making.
In October, some 37% of job seekers said job security was one of the most important things they are looking for in their next job, up from 31% a month earlier, according to ZipRecruiter’s Job Confidence Index.
If you’re starting out in your career, Terrazas said, it’s always worthwhile to focus on long-term growth.
You should also look at the entire package when assessing the value of a job, Pollack said. If your next job is at a smaller company, “you can often perform a wider range of tasks and get a broader experience,” she noted.
“Finding a job is becoming a more urgent priority for many job seekers as inflation whittles away at their savings and the risk of a possible downturn appears to grow,” Pollak added.
Start your own side business
Remote work makes starting a business a lot cheaper than before the coronavirus pandemic, Pollak noted. Now, founders do not always need to rent offices, and it’s easier to find remote workers and affordable online services.
“You don’t need a flashy office. You don’t need all this stuff anymore. You can hire someone to make your website,” she said. And setting up an online store, for example, can be done with a simple computer program rather than a raft of technicians.
Some venture capitalists recently told MarketWatch that they expect the economic downturn to last for the next year or so as the tech industry goes through a period of readjustment. They’ll be watching for smart startups to emerge.
“Often in tech recessions, we see the hardiest, most innovative, sound tech companies arise,” Pollak said. That’s because in this environment, it’s very difficult to get funding, so you need to bootstrap the company and keep it profitable from day one, she added.
But you don’t need a big life-changing idea, said Glassdoor’s Terrazas. Even moonlighting as a career coach or personal trainer can help when you’re between engagements, he said.
“That’s not necessarily a business that becomes a global giant,” he said. “That’s more of a way for people to make ends meet while thinking, ‘What’s next?’”
Foreign workers should move fast
If you are working in the U.S. on a visa, timing is everything. U.S. immigration law gives people with H-1B visas a 60-day grace period to stay in the U.S. if they lose their job.
Apply for as many roles as possible, lean into your network and start interviewing now, Sophie Alcorn wrote in a a recent column for TechCrunch. Alcorn is the founder of Alcorn Immigration Law, which has offices in Mountain View, Calif. and New York.
Ask the visa-support question early in the interview process, Alcorn wrote, so that you don’t waste precious days or weeks only to find out that the prospective employer is not in a position to provide visa support.
And if you want to pursue starting your own company, get moving now and consult an immigration attorney to explore your options.
And finally …
Never take a layoff or a setback in your job search personally. The road ahead will be stressful enough without carrying around resentment or insecurity.
Contrary to the common assumption that companies often lay off workers who do not perform well, experts told MarketWatch that a lot of the recent layoffs among tech companies had more to do with the team or product.
“It’s not a reflection on your skill set, your desirability as an employee or your prospects in the future,” Alcorn said.