The recent spate of tech layoffs has caught many people off guard. After all, the industry was considered to be layoff-proof for years — until now. This article will look at what has prompted the layoffs, what effect they’re having on the workforce and how some companies are mitigating their impact through a variety of strategies.
There are a few major causes of this latest round of layoffs: a). Investor pressure: For most large, publicly-traded tech companies, layoffs are more about satisfying investors than maintaining profitability or business health. They’re shedding underperforming or slow-growth business units to make room for more profitable ones, and to free up capital for investment in other growth initiatives.
2). Economic reasons: It’s no secret that the global economy is slowing down, and it’s possible that some of these layoffs are an attempt to reposition businesses ahead of a coming recession. This is particularly true of some smaller, privately-held tech companies that have had trouble raising funding during the COVID-19 pandemic and may be running out of cash.
3). A changing workforce: Many companies are implementing cost-saving measures by cutting overhead and outsourcing tasks like software development to lower-cost markets such as India. Those changes could have an impact on the availability of tech skills in the US, which is a concern for employers trying to build a high-performing team.
In addition, the tight labor market is causing some tech workers to consider career moves outside of the field. For instance, it’s not uncommon for laid-off workers to find new jobs in nontech industries like financial services, consulting or manufacturing. This is often an easier transition than leaving the tech sector altogether, since there’s still a demand for many types of tech skills in these sectors.