When Lyft laid off 13% of its employees in November, Kelly Chang was shocked to find herself among 700 people who lost their jobs at the San Francisco-based transportation firm.
“It seemed like tech companies had so many opportunities,” said Chang, 26. “If you got a job, you were done. It was a sustainable path.”
Brian Pulliam, on the other hand, wasn’t fazed by news that cryptocurrency exchange Coinbase was cutting his job. Since the 48-year-old engineer was fired from his first job at video game company Atari in 2003, he said he asked himself once a year, “If I were fired, what would I do?”
The contrast between Chang and Pulliam’s reactions to their respective professional disappointments speaks to a generation gap that is becoming clearer as the tech industry, which has expanded rapidly during the pandemic, is heading for mass layoffs.
Microsoft said this week that it plans to cut 10,000 jobs, or about 5% of its workforce. And on Friday morning (20) Google’s parent Alphabet said it plans to cut 12,000 jobs, or about 6 percent of total workers. These cuts are coupled with massive layoffs at other tech companies like Meta, Amazon and Salesforce.
Millennials and Generation Z, born between 1981 and 2012, launched careers in tech during a boom decade when jobs multiplied at the same rate as iPhone sales. The companies they entered were taking over the world and defying economic rules. And when they went to work for companies that offered bus rides to the office and perks like free food and laundry, they weren’t just taking on a new job; they were taking on a lifestyle. Few had experienced widespread layoffs.
Baby boomers and Generation Xers born between 1946 and 1980, however, experienced the biggest contraction the industry has ever seen. The dot-com crash of the early 2000s eliminated more than 1 million jobs, emptying Silicon Valley’s 101 freeway of users as many businesses closed overnight.
“It was a bloodbath and it lasted for years,” said Jason DeMorrow, a software engineer who was fired twice in 18 months and was out of work for more than six months. “As troubling as the current crisis is and as sympathetic as I am to those affected, there is no comparison.”
The generation gap in the technology sector is a broader phenomenon. A person’s year of birth greatly influences their views on work and money. Early personal experiences strongly determine a person’s appetite for financial risk, according to a 2011 study by economists Ulrike Malmendier of the University of California at Berkeley and Stefan Nagel of the University of Chicago.
The study, which analyzed the Federal Reserve Consumer Finance Survey from 1960 to 2007, found that people who came of age in the 1970s, when the stock market stagnated, were reluctant to invest in the early 1980s, when it boomed. . This trend reversed in the 1990s.
“Once you have your first crash, things change,” Nagel said. “You realize bad things happen and maybe you should be a little more cautious.”
For Generation X, the dot-com crash came early in their careers. From 2001 to 2005, the technology sector laid off a quarter of workers, according to an analysis of data from the Bureau of Labor Statistics at CompTIA, a technology research and education organization.
The layoffs that swept the industry were worse than the recession of the early 1990s, when total tech jobs fell by 5%, and the global financial crisis that followed in 2008, when the workforce is contracted by 6%.
In 2011, the tech sector began a hiring boom that would last a decade. It added more than 100,000 jobs a year on average, and by 2021 it had regained all the jobs it lost when the dot-com bubble burst.
Job numbers represent software, hardware, technology services and telecommunications companies including Apple, Meta, Nvidia, Salesforce and others. But they may exclude some tech-related companies, such as Airbnb, Lyft and Uber, due to job market ambiguity in government reports, which classify some companies as consumer services, said Tim Herbert, director of research at CompTIA .
The biggest increases in tech jobs have come after the pandemic started, as companies scrambled to meet growing demand. In 2022, the industry created nearly 260,000 jobs, according to CompTIA, the most jobs created in a single year since 2000.
The surge in tech jobs continued last year, even as major layoffs began, though it’s unclear whether that trend has continued this year. New job opportunities have contributed to nearly 80 percent of laid-off tech workers saying they found a new job within three months, according to a ZipRecruiter survey.
“We’re seeing the pandemic hiring craze correct, not a bubble burst,” said Andy Challenger, senior vice president at career transition firm Challenger, Gray & Christmas.
Last fall, David Hayden, a program manager with a PhD in physics, learned from his manager that he was being fired from the semiconductor company nLight. Concerned about his daughter’s tuition fees, he immediately contacted recruiters to arrange interviews. In December, a month after being fired, he took on a new role at Lattice Semiconductor.
In every interview, Hayden, 56, has said he was fired. His experience during the dot-com crisis, when he avoided layoffs even as talented colleagues were fired, taught him that cuts aren’t always rational.
“The embarrassment of being fired is gone,” Hayden said. “Companies know that a lot of good people are being fired right now.”
Erin Sumner, a software recruiter at Facebook’s parent company Meta, bragged to prospective hires that the company was the fastest to reach a $1 trillion market cap. She said she highlighted the company’s strengths, including last year when its stock price plummeted and its core business, digital advertising, struggled.
When rumors of the layoffs started circulating last year, he assured colleagues their jobs were safe, pointing to the more than $40 billion in cash the company had in the bank. But in November, she herself was among 11,000 workers made redundant.
“It was heartbreaking,” said Sumner, 32. He landed a new job as lead recruiter for a startup called DeleteMe, which aims to remove customer information from search engine results. But he said he cringe every time he reads about more tech layoffs.
“I fear the situation will get worse before it gets better,” Sumner said. “There’s no guarantee. I got fired from the safest company in the world.”
A similar reversal of fortune has challenged companies that sell software services. Shares of industry leader Salesforce fell nearly 50% last year on slowing sales growth. The company splurged during the pandemic, spending $28 billion to buy Slack Technologies and growing its headcount from 49,000 to 80,000 in two years.
During a general meeting last week to discuss the company’s decision to lay off 10% of its employees, Marc Benioff, CEO of Salesforce, tried to empathize with his disaffected team by putting the cuts into context.
“I’ve been through many difficult times at this company. Every loss reminds me of another loss,” he said, according to a recording heard by The New York Times. “Obviously we’re talking about a large layoff. I’m thinking of the employees who have died. I’m thinking of the people we’ve lost and didn’t want to lose.”
When asked what advice he would give to employees concerned about the company’s plight and new layoffs, Benioff suggested “gratitude.”
Translated by Luiz Roberto M. Gonçalves
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