While there was an initial dip as the economy reeled from the start of the COVID-19 pandemic, the tech industry quickly recovered as the surge of people working from home generated record demand and record profits. There has been a hiring bonanza of late, with salaries soaring over the last year, and companies struggling to find and retain the best talent. This demand pushed salaries for some technical roles to 200% or more of the pre-pandemic levels. Though just as quickly as the boom came, it’s come crashing down.
As the pandemic wanes and life slowly returns to normal, the tech industry is shedding jobs at a rapid pace. Over 25,000 jobs have been cut so far this quarter, and it seems to only be getting worse. Security start-ups have been hit hard, with OneTrust cutting 25% of its staff, some 950 people, Lacework laying off 20%, Latch laying off 28%, Cybereason cutting 10%, and rumours of cuts quietly underway at a variety of other startups. While a number of these companies are in the unicorn club of startups valued at over $1 billion, they are not immune to the rapid changes in the market we are seeing today.
The pandemic has forced many people to confront their work-life balance and how they want to spend their time, and for some, that has meant making tough decisions about their careers.
There are positives to be taken from this, with many people realising that work is not everything, and that they can make a difference in other ways. With people no longer commuting, there is more time to spend with family and friends, and more time to pursue hobbies and interests. For those that come to enjoy these benefits, going back to the office is a bitter pill to shallow.
With jobs being cut, and hiring freezes taking effect, those that have been waiting for the best time to find a new job to maintain their new lifestyle are facing the reality that they may have waited too long.
The layoffs come as a result of a number of factors, including the end of the government’s stimulus programs, the winding down of pandemic-related work, and a shift in corporate priorities. Many of the companies that have announced layoffs are in the process of “right-sizing” their businesses after a period of explosive growth. Others are making tough decisions in the face of an uncertain future, and uncertain ability to raise more money from investors.
The job cuts are a sign that the tech industry, which has been one of the few bright spots in the economy during the pandemic, is starting to feel the effects of the recession. The industry had been largely immune to the effects of the pandemic, but as the economy has started to contract, that has started to change. The layoffs come as a number of companies are revising their guidance for the rest of the year, and many are cutting their forecasts for revenue and profit. This is likely to put pressure on salaries and bonuses in the tech industry, which had been soaring.
These cuts have come as a shock to many workers in the tech industry, who had been enjoying a boom times over the last year. But they are a reminder that the industry, like any other, is subject to the ups and downs of the economy.