How will recent layoffs change worker behaviour in tech?
The last year of tech has been CRAZY. After an exciting 2020 and 2021, the industry has been hit with so much uncertainty, resulting in layoff after layoff. At first, recruiters were laid off, then business teams, and now even engineers are being sent off. Layoffs are to be expected during periods of economic changes, but the tech layoffs have been cold and brutal. Several were laid off via email; others got to their offices and discovered they had lost entry to the office complex. Even worse, it’s created visa and residency issues for some workers in certain countries. The times are truly wild.
For decades, tech workers have been the beloved. Lavished with perks and benefits, fun offsite events, and over-the-top colourful offices, money was spent, and people truly felt special. They belonged*. It turns out we’re all cogs in the capitalism wheel. I like this good explainer from ComputerWorld that details why these layoffs are happening.
Layoffs aren’t fun, and they’ve been a huge wake-up call for many people who work in tech. Here’s how I think these recent layoffs and other events will impact worker behaviour.
1. More people will come to terms with the fact that work is work
Many missions have inspired tech workers over the years. Google has “organise the world’s information and make it universally accessible and useful,” while Facebook’s is “to give people the power to build community and bring the world closer together.” In Africa, people were “banking the unbanked,” “connecting Africa to the world via payment solutions,” and “building the future.” Many were inspired by these mission statements and thrived to build software and hardware to change the world. When economic uncertainty hit, none mattered to the people running things — numbers mattered more, regardless of how much cash flow companies had and whatever unicorn potential the company had. This is the feeling among many tech workers: Work is work. A job is a job. Labour remains labour.
2. Stock is stock until it becomes cash
We were told ownership would make us rich, so workers accepted relatively lower salaries and stock options at startups. Typically, about 90% of these go to $0. In uncertain economic times, the number of failures is higher. Things are so bad for startup stock that a company raised $6.5B to fix stock compensation issues. Tech workers still like stock options and would accept them but are now optimising for cash today. Cash remains king, and I said what I said.
3. Workers will take other jobs
Having just one job right now is a risky endeavour. For a long time, this was the relationship between employees and their employers:
Workers simply aren’t going to accept these things anymore. One source of income is high risk. People want to start courses, write books, take contract jobs, and run a paid newsletter. If this seems weird or unacceptable to you as an employer, you’re selfish, and that’s okay. Elon runs five companies, Jack was running 2, and several other tech founders have had and still hold multiple leadership roles. This is happening alongside social and legal changes in the worker-employer relationship. More tech workers are unionising; several governments are mandating pay transparency, 4-day workweek experiments are gaining ground, and people want to work from anywhere.
In the last few months, I’ve seen many C-suite and VP executives of tech companies push their brand harder, write more often, and launch courses. The people are taking power into their own hands. Others have gone full creator mode on YouTube, TikTok, and LinkedIn. Some others are starting smaller software consultancy firms and other types of agencies. People can’t rely on one job any longer. Nobody knows what will happen tomorrow or if they will lose their jobs unexpectedly for reasons beyond their control.
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For a long time, many people just wanted to work in tech. It didn’t matter what industry it was in, the business model, and how terrible the work culture was. Many were fascinated by the new shiny industry and the opportunity to work on life-changing projects. They believed in the vision of the visionaries and went with them on several adventures. Visionaries got rich, and followers (even investors) got wrecked. As I said earlier, cash is king. People have learned that shiny ideas are excellent, but business models and sustainability are better. We are still trying to figure out if ride-sharing will ever be profitable. The largest e-commerce platform is still subsidised by its cloud computing arm.
5. There will be more job hopping
The worst thing this season has been watching long-term executives of companies get dismissed without fanfare. Single people, parents, the newly married, new homeowners, temporary residence holders, it didn’t matter to companies. Everybody got sacked. Loyalty meant nothing. Some folks got fired by email, others were fired in virtual meetings with a thousand others, and some were abruptly logged out of their email. Being loyal to a corporation for 2 or 3 decades didn’t matter — they paid and owned you until they weren’t interested.
The result of this will be more job hopping. People will stay at a company, and as soon as a better offer comes, they will leave because they can’t rely on companies to be loyal to them or to reward their loyalty and years of service. This is going to be bad for the industry as a whole — every time a worker leaves, it creates knowledge debt, and if workers are not treated well during their exit, it’s going to be tough to call Jane and ask her questions about the project she was working on.
6. More people will opt to work tech roles in traditional brick-and-mortar industries and companies
We always knew that several industries were being digitised — we didn’t like working there — they talked too much and didn’t ship fast enough. Now, many people are considering large global multinationals in shipping, commerce, retail, consulting, medicine, and automobiles. Thanks to rapid digitisation, many companies need tech workers and are employing them. As this article says, “The class of 2023 values stability”. If a legacy company with a solid business model needs to build its tech team, I envisage many people would seize the opportunity even though it may not pay as much or be as buzzy as a startup.
7. People don’t need that much money to be happy with their jobs
Many workers have realised that they don’t need a crazy amount of money to survive. While we were encouraged to seek more, and our ambition was measured by how much money we wanted to make (for ourselves or employers), it seemed like a silly game that never ended. Many people realise they never needed that much money, to begin with, and shouldn’t even have been stuck playing the game.
In conclusion, recent tech industry layoffs have prompted tech workers to reassess their priorities. Cash compensation is now preferred over stock options, job hopping will become more common, and non-tech companies are viewed as more stable options. This shift in mindset has led to tech workers prioritising their financial security and career. In all, it’s a good thing. Change and reassessment are always welcome.
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Some notes
*Whether employees thought company perks were too much didn’t matter. Companies spent that money anyways. I always found some of the offices too colourful and too childish. As an employee, I advised several times to cut travel and hotel costs — it didn’t matter. The company had money, and leadership believed the tap was overflowing — there was no need to save.
*Leadership will continue to take the blame for how these layoffs have happened. We all acknowledge that laying off people is a tough decision, but the manner has been inhumane and unreasonable — especially for those with visa issues.
