Remember the golden age of working for the tech industry.
Fortune is unveiling its top 100 best companies to work for.
Google's number one again this year, it was number one last
year and the year before. Google has everything - free food
everywhere a Wi-Fi enabled free shuttle. They have horseshoe
pits, volleyball courts street hockey, like you know pools.
Netflix's letting you parents take as much time off as they
need during the first year of their child's birth or adoption.
Salesforce has mindfulness areas designed with help from monks.
Airbnb gives employees a two grand travel stipend. Music
discovery platform Pandora even pays for its workers to have
gender affirmation surgery.
Let's pause here. It's not only big names like Google, Apple and
Amazon that entice workers with these perks, smaller tech
startups were also offering workers outlandish extras,
everything from performance based prizes to an endless
supply of company branded swag.
Top performers every month to the New York office, get an
actual custom oil canvas painting.
If you pop it actually reveals a secret room. And we have like
meetings in here do poker and maybe even close the deal have a
shot of whiskey or something.
Here is a must come spot for anybody who comes to New Relic
is where we have all our swag all our New Relic pride. And the
great thing is, is you can just come and grab whatever you want.
Well, that was the 2010s This is how tech companies are grabbing
headlines these days.
Layoffs in technology just keep coming. the latest Google
cutting hundreds of jobs in its engineering product and hardware
divisions.
So this is the latest round of layoffs we are hearing about in
tech today. It's two fintech companies Block and PayPal.
Microsoft cutting almost 2000 jobs at Activision Blizzard and
Xbox as the tech landscape resets.
Layoffs in the tech industry surged in 2023, sparked by high
interest rates and a pivot to generative AI. The pace of
layoffs in the tech industry has persisted well into 2024.
Workers who were laid off now see this industry in a different
way.
When you work for a big tech company, you had this assurance
that you were going to be okay that you were part of this
greater thing that you were part of this culture that really
meant something - you were making a difference. At any
moment -snap- you could be axed.
Before 2020, people were interested in the tech industry
just because I mean, the high pay prestige, I think just
seeing it as different, right? You have all these traditional
companies. And then you have all these companies that are just
doing things different, and they look like kind of the future of
work, people thought it was gonna be like a huge shift
towards these fun environments and flexible environments and
places where they put employees first. Now that sort of shifted
anything. Well, these aren't too much different than these older
traditional companies that people were already working at
in the early 2000s.
The tech industry as a whole has completely lost its luster
because people are starting to recognize that the tech industry
is just like any other industry. It was up one day and now it's
down. You consider what's going on a companies like Google.
Consider what's going on in the companies like Amazon, the
moment they started to announce layoffs, people start to
recognize that these companies these tech giants are just like
every other company. They hire today and they get rid of you
tomorrow.
The tech industry completely dominated the news headlines in
the 2010s. After the 2008 financial crisis, the US Federal
Reserve brought interest rates to near zero and kept them there
for years. That allowed tech companies and startups to borrow
money at rock bottom prices, and open the floodgates for venture
capital money too.
Boosted by ultra low interest rates and a ready supply of
venture capital money and skyrocketing adoption of
smartphones and social media, tech companies took over the
stock market as well.
Working at one of these tech companies became a way to get
rich. Employees often got a good portion of their compensation
paid out in stock options. As tech stocks rose, workers got
richer and richer. The tech heavy NASDAQ for example, rose
about 347% from January 2010 to December 2019.
Netflix was the biggest gainer among the FAANG stocks surging
more than 4,000%.
I think for a long time working for a major tech company like
Google or Meta, Microsoft was really seen as a badge of honor,
because these were companies that were growing tremendously.
And through most of the lifetime, for many of our
current students right now in our recent graduates, all they
saw their entire childhood was growth.
They saw these companies get larger, they saw them innovate.
They saw new products that really transformed their day to
day life. So to be able to work in those companies was seen as
prestigious, and it was seen as a very positive step in building
their own careers to be able to contribute to the technology
that they themselves and their families used every single day.
People definitely look at you differently when you have
Microsoft or a larger tech company on your resume. People
have called it the easy door into your next job or whatever.
I don't know if it's that far. But definitely if you especially
if you're going to a place that is built on Azure and you have
Microsoft experience that seems like a no brainer. Or if you
have going to somewhere that's a Google based company, you have
Google on your resume or Amazon, I think it probably puts you
towards the front of the line.
When COVID-19 began, the economy initially struggled, but the
tech industry thrived.
The Federal Reserve's swift actions, such as cutting
interest rates back to near zero boosted tech stocks. This in
turn led to an increase in tech jobs, primarily as people stayed
home.
However, tech stocks took a hit once the Fed started raising
rates in 2022. So the industry started using mass layoffs as
one of the many ways of belt tightening. Wall Street loved
this move, reflected in the bounce in tech stocks in 2023.
The tech heavy NASDAQ climbed to 43% in 2023, its best years
since 2020.
In the pandemic, the tech industry saw some pretty big
pickups in job posting games on Indeed platform. We saw really
strong hiring. People were at home, they were consuming more
kind of these tech goods and services. And many tech
companies adjusted to that and hired more workers.
So we saw a big run up in 2021-22. And then in 2023, we
saw some of that demand start to kind of cool down and soften. In
2024, so far, we've seen somewhat similar to 2023, some
layoffs being announced, we've seen kind of a continuation of
pull back and job postings in the tech industry.
But again, a lot of these layoffs that we've seen so far
this year in 2024, have really been about right sizing and
adjusting to a world of post Covid consumer demand and trying
to figure out what does the world look like after Covid. So,
a lot of it really comes down to businesses making moves to
really understand, you know, where their consumers are, and
trying to fit their workforces to that demand.
Now we see the stock market reacted quite favorably to this
round of layoffs. We see these record stock prices for a lot of
these tech companies. The investors really favored
profitability, really favored this lean year that these tech
companies had. And so instead of rewarding the growth that we saw
in them all pursue years ago, they're now rewarding profit.
And so the layoffs have continued, people have become
used to them, and regrettably, and sadly, it seems that the
layoffs is going to be the new normal.
Layoffs in tech show no signs of letting up. In fact, more and
more companies have embraced quote, efficiency, as a common
mantra in recent earnings calls.
A memo sent out by Elon Musk to the staff outlining that the
company will be cutting more than 10% of its global staff.
Layoffs are the first for Apple since the pandemic and come
shortly after the company shuttered its self driving car
project.
Amazon is cutting hundreds of jobs from its cloud computing
division Amazon Web Services.
Even though mass tech layoffs continue dominating headlines,
the labor market still seems strong. The US economy added
303,000 jobs in March well above the Dow Jones estimate for a
rise of 200,000 with the unemployment rate edging lower
to 3.8%.
The tech layoffs have prompted new workers to seek other
opportunities according to Handshake, a popular free job
posting site for college students and graduates. So the
share of tech majors job applications submitted to
internet and software companies dropped by more than 30% between
November 2021 and September of 2023, while the share of
applications submitted to government jobs, more than
doubled.
And part of the reason why this is happening is because
stability is such a major factor in student's decision around
what types of jobs they apply to and what types of jobs they
accept. 77% of this recent class of 2024 cares about stability as
the number one factor. And the government, for example, is an
entity that provides a strong level of stability, whereas
they're looking at the headlines and the news. And they're paying
attention to all of the layoffs that are happening in Big Tech.
And that makes them feel unstable.
The layoff pandemic is not necessarily impacted tech the
way we thought it was - largely because of the fact that these
jobs still pay really well. And there's still a degree of
luster. It's not nearly as exciting as it was 20 or 30
years ago. But it's still exciting. And people really want
that bullet point on the resume. Even if they only lasted a
Google, for let's say six months or a year, they can still say
they work there. I think what we're starting to see ultimately
is that people are starting to consider other options. Whether
they're deciding that once they get their degrees, they're going
to go create their own businesses, they're going to get
government space, they're going to get in other industries,
where there is a need for their technical skill set where they
can essentially be a big fish in a small pond, which in many ways
gives them job security that they don't necessarily get in
the tech industry.
People that are wanting to work in tech and wanting to still
stay in tech. I think we just have to be a little bit more
careful, and little bit more guarded about keeping our
options open and not feeling the need to be extremely loyal and
dedicated to one company. Because they surely are not
dedicated and loyal to us, no matter what your manager no
matter what your director is saying, no matter what praise
you're getting, it doesn't really matter sometimes at the
end of the day, at a lot of tech companies, unfortunately.
These layoffs have, to an extent hurt the luster of the tech
industry, but not to the point that I think that people all of
a sudden are going to decide not to go work for them anymore. But
even we consider that recent college grads, five years ago,
they couldn't wait to go to work for the big tech industry.
But now they're considering things whether I go to tech,
whether I go to government, whether I go someplace else, I
want to go someplace where I feel like I'm part of something
bigger than myself.
Tech companies are just not offering that anymore, because
they're not necessarily disruptive. And I'm talking the
big giants. I'm talking about the Amazons of the world, the
Microsofts of the world, the Googles of the world. They're
not seen as disruptors. Now they're seen as more established
companies.
To the people who are chasing like a tech dream job, I think,
keep your options open and be realistic. Don't just focus on
one company and feel like you have to get into that one
company because it's the dream. Pay attention to the other ones.
Pay attention to smaller companies. There's a lot of
really good smaller companies that are not in the headlines
that are great places to work, but also don't hold back. Drive
towards something and have a goal. Just temper your
expectations.
I think the glory days of the tech industry will certainly
continue to flow back into the existence in the eyes of our
early talent. I think it will look different as it continues
to evolve. I think the values and the needs and the desires of
our early talent will continue to change as the macro economic
situation around them also changes. And I think Big Tech if
they want to remain an attractive option for early
talent will need to continue to evolve their workplace, their
expectations and their benefits.