Why has the tech industry had massive layoffs?

Eric Gordon and his friend both left the service industry less than a year ago to get jobs as user experience designers. 

His first week on the job, Eric recalls a company meeting where he was told layoffs would affect every team within his new company.  

"To hear that we were just having layoffs being there for such little time was kind of soul-crushing," Gordon said. "Kind of I thought dealt my hand right there."

Since the first of this year, over 100,000 employees have been laid off in the tech industry, according to tech layoffs tracking site layoffs.fyi.

It’s a startling number that adds to the 154,000 layoffs that plagued the industry last year.  

Daniel Keum is a professor of management at the Columbia Business School who says the layoffs are a correction to massive growth from the last few years.

"These are the exact areas where they’re laying off the most people. So, for Amazon it’s devices," Keum said. 

During the pandemic, online work boomed, and many tech companies anticipated it as a new normal, but now as we ease back into life before the pandemic, companies are laying off workers to bolster their balance sheets.  

There's a push to train more ironworkers

There's a push to train more ironworkers

Apprenticeship programs that offer free on-the-job training are available across the country.

LEARN MORE

"They were overly optimistic in their ability to grow, and the growth never materialized," Keum said. "I mean Google, Amazon; their existing businesses had gotten so successful so it’s sort of their pas successes constraining their future investment."

That’s what happened to Chris Graber’s brother just last month. Both he and his brother work in tech, but he says his brother was quickly able to find other work since his skills are still needed. 

"Even though people are getting laid off, and even from our own recruiting where I’m at, we don’t see anyone kind of taking less right? People, even if they’re laid off and even if there’s a little bit of fear about the future, the employees in tech can still demand the work from home and other things they’re used to," Graber said. 

Keum says that’s because this isn’t a problem with tech at large. He says the layoffs are happening in certain sectors of certain companies, and many times they’re larger ones so smaller tech companies are flooding the applicant pool looking for people who were recently laid off. 

"You are still the most heavily sought-after talent in the world, across industries. So, in the midterm, you might have to rethink your transition," Keum said. "But I think in 2-3 years, or four years, the hiring will continue. Google, Meta, Amazon, these companies will continue to grow and dominate the economy." 

This might not help those who have just been laid off, but it does show promise for the future.