Another day, another round of tech layoffs…at least, that’s what it feels like whenever you scroll through your LinkedIn feed.
Companies like Meta, Alphabet, Microsoft, and Twitter, all made headlines in 2023 for mass layoffs, leaving widespread uncertainty in their wake.
On the surface, it seems like a bad time to be in tech. And, if you’re currently building your own tech career, you may well be worried about what this all means for you.
Are the tech layoffs as bad as they seem? What do the big tech layoffs tell us about the state of the industry as a whole? And, most importantly, how do you—a tech professional, current or aspiring—navigate these tumultuous times and ensure your own job security?
It’s time to shed some light on what’s really going on. In this post, we’ll dig into what’s driving the big tech layoffs and explore what it means for those working in tech.
Keep reading to uncover:
The state of tech layoffs in 2023—what are the numbers?
What’s driving tech layoffs in 2023?
How worried should you be about tech layoffs? Is tech still considered a secure career path?
How can you protect your own job security amid tech layoffs? 5 actionable strategies
Navigating tech layoffs: the takeaway
The state of tech layoffs in 2023—what are the numbers?
First and foremost: what are the actual numbers? Let’s consider the state of the 2022-2023 tech layoffs in terms of cold, hard data.
Since taking over Twitter (currently being rebranded as ‘X’) in October 2022, Elon Musk claims to have laid off about 80% of its workforce—reducing Twitter’s employee count from 8,000 to around 1,500.
In January 2023, Microsoft announced that it would be letting go of around 10,000 employees—a reduction in headcount of just under 5%.
In January 2023, Alphabet (Google’s parent company) announced plans to lay off 12,000 employees—affecting around 6% of the company’s workforce.
Also in January 2023, Spotify let go of 600 employees—reducing overall headcount by about 6%.
In February 2023, both Dell and Zoom Video Communications, Inc. made significant layoffs, letting go of about 6,600 and 1,300 employees respectively (affecting 5% and 15% of their respective workforces).
In March 2023, Meta let go of approximately 10,000 employees. This was the second round of layoffs for the company, having already laid off more than 11,000 people in November 2022.
Also in March 2023, Amazon and Accenture announced significant layoffs. Amazon, which had already laid off about 18,000 employees between November 2022 and January 2023, let go of another 9,000 employees (about 3% of its workforce). Accenture went public with its plans to lay off 19,000 employees (about 2.5% of its workforce) over the next 18 months.
In July 2023, Microsoft announced further job cuts (on top of its 10,000 layoffs in January). These will mostly affect salespeople and customer success representatives.
That’s how the big tech layoffs have played out since late 2022 and into 2023. Admittedly, the numbers paint a rather bleak picture—but it’s important to consider the context surrounding them.
With that, let’s explore the why behind the data.
What’s driving tech layoffs in 2023?
Multiple factors are driving the big tech layoffs—and they don’t all necessarily spell bad news for the tech industry at large.
In many cases, the tech layoffs are a result of companies scaling back to “normal” employee numbers after over-hiring during the pandemic. That, coupled with the general economic downturn and rising inflation rates, means that companies are tightening their purse strings and looking to become more cost-efficient.
While some industries, like travel and hospitality, really suffered during the pandemic, the tech industry flourished. Suddenly, people were doing practically everything online—working, shopping, attending school and university, having therapy, even working out—and the need for technology had never been greater.
To meet the sudden surge in demand, many tech companies hired and expanded rapidly. Meta, for example, nearly doubled their employee headcount between March 2020 and September 2022.
But, as the pandemic subsided, many parts of the world slowly returned to “normal”, resuming more in-person activities. As such, the demand for tech services has slowed somewhat—at least in comparison to what it was like at the height of the pandemic. Many of the new hires made during the pandemic may now be redundant, with companies making layoffs to return to pre-pandemic staff numbers.
Another major factor is the economic downturn. While we’re not technically in a recession at the time of writing, there’s no denying that we’re facing a period of economic uncertainty.
Inevitably, many companies are experiencing slower revenue growth—and tech companies are not immune.
Speaking about the company’s layoffs in January 2023, Microsoft CEO Satya Nadella said:
As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less. We’re also seeing organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.
I think for us as a global company, we’re not going to be immune from what’s happening in the macro. We will have to also get our operational focus on making sure our expenses are in line with our revenue growth.
Alphabet, Google’s parent company who let go of 12,000 employees in January 2023, wrote in a staff memo that it faces “a different economic reality”.
Meta CEO Mark Zuckerberg also spoke of “cancelling lower priority projects” and preparing for “a year of efficiency”, saying that he had “underestimated the indirect costs” associated with these initiatives.
Ultimately, many big tech companies are turning to layoffs as a way to course-correct overhiring, cut costs, and ride out the economic downturn.
How worried should you be about tech layoffs? Is tech still considered a secure career path?
Now for the big question…What does this all mean for people working in the tech industry?
And, if you’re currently working towards a career in tech, is this still a career path worth pursuing or should you rethink?
It’s hard not to feel pessimistic when you read about thousands of tech workers being laid off and about the bleak reality of recessions, rising inflation rates, and the cost of living crisis.
But, the doom and gloom of tech layoffs aside, rest assured that tech is still considered a secure career path—and will be for years to come.
How can we be so sure? Consider the following:
- The global tech industry is still growing. As of February 2023, MGI Research estimates that global tech spending (this includes consumers, publicly traded organisations, privately held companies, non-profit organisations, and government spending) will grow from $8.51 trillion in 2022 to $11.47 trillion in 2026. That’s a 5-year compound annual growth rate of 7.75%.
- High-profile layoffs aren’t reflective of the entire tech industry. Media reporting of big tech layoffs can distort the bigger picture. Of course, tech sector layoffs—and especially those at big-name companies like Twitter, Meta, and Amazon—are highly visible, and there’s no denying that many people have been affected. But, what seems like a huge number of employees being laid off only translates to a small percentage of the tech workforce. That’s not to undermine the impact of those layoffs; just a reminder that they don’t represent the tech industry as a whole.
- Tech products and services may be experiencing slower revenue growth—but tech skills themselves are still in high demand. Not all tech layoffs are aimed at tech employees. Many of the people affected are in non tech-related roles within a tech company. Actual tech skills themselves, like UX design, UI design, and software engineering, are in high demand. In fact, UI/UX designers currently top Indeed’s list of the 19 most in-demand tech jobs.
- Despite layoffs, experts are still predicting strong job growth for the tech industry. According to CompTIA’s State of the Tech Workforce report, projected growth rate for tech jobs over the next ten years is nearly double the national growth rate for all other jobs. More specifically, UX and UI design jobs are predicted to grow at a rate of 4.7%, putting them up there with data scientists, software engineers, and cybersecurity analysts.
The general consensus remains: interpret the data and headlines about big tech layoffs with caution. As Richard Wahlquist, chief executive at the American Staffing Association, puts it:
Despite recent headlines involving layoffs at major companies, tech jobs remain among the most in-demand jobs in the labour market.
In a nutshell: There’s no need to panic about tech layoffs—tech is still considered a very secure (and very rewarding!) career path.
How can you protect your own job security amid tech layoffs? 5 actionable strategies
There’s no guarantee when it comes to job security, and that goes for any career path or industry.
While nobody can make themselves entirely layoff-proof, there are steps you can take to boost your employability and set yourself up for a successful career in tech:
- Keep your skill set sharp and relevant
- Embrace AI (and make it work for you)
- Focus on building a strong network
- Diversify your job search—look beyond the tech industry for opportunities
- Interpret news headlines with caution
Let’s put those into action.
1. Keep your skill set sharp and relevant
This is sound career advice in any job market: keep your skills up-to-date and make sure you’re evolving in line with the industry.
This might mean obtaining a formal certification in your field or taking an upskilling course. If you’re a designer, for example, you might upskill with a coding course. Or perhaps you’re seeing a sharp rise in job ads for content designers and want to add UX writing to your skill set.
Keep an eye on how your industry is moving and what skills are growing in demand. Then, be proactive about learning new skills and adding them to your portfolio.
2. Embrace AI (and make it work for you)
AI is another hot topic. Many are concerned that AI is partly to blame for the tech layoffs—and that it will slowly but surely push people out of jobs in the long term.
But, while it’s unlikely that AI will completely replace UX designers and other tech professionals, we can’t ignore the fact that it will change how we work. Rather than fearing AI, treat it like any other new tool or trend: learn it, embrace it, and use it to your advantage.
This is especially important as companies seek to ride out the economic downturn and operate more efficiently. If you can use AI to speed up your processes and open up new possibilities, you’ll only add to the value you bring to your company.
For more advice on using AI to your advantage, check out this interview with Nick Babich, Principal UX Designer at Brain Technologies.
3. Focus on building a strong network
They say your network is your net worth. According to some estimates, 60% of jobs are found through networking alone.
No matter where you’re at in your career—just starting out, facing unemployment, searching for your next opportunity, or perfectly happy in your current role—never stop nurturing and growing your network.
A strong professional network offers community, connection, inspiration, and insight. And, if ever the time should come, it will prove extremely helpful for finding your next role.
4. Diversify your job search—look beyond the tech industry for opportunities
If you’re a tech professional (or aspiring to be one), you may be inclined to focus your job search on tech companies themselves. But there’s a whole world of opportunity beyond big tech!
Handshake, an early career community in the US, reports that tech graduates are increasingly applying for jobs in other sectors. Notably, graduates with tech skills are applying for roles within the government, healthcare, and non-profit sectors.
Big tech may be making cuts, but other companies and sectors are thriving—and they all need tech skills. Diversify your job search and be open to opportunities beyond tech companies themselves.
5. Interpret news headlines with caution
Our final piece of advice is to look beyond the headlines. High-profile, highly visible big tech layoffs don’t automatically spell bad news for the entire tech industry at large.
It can be incredibly disheartening, demotivating, and indeed worrying to read about the mass layoffs. And, while it’s important to keep abreast of what’s happening in the industry, it’s also important to remain realistic and positive.
Navigating tech layoffs: the takeaway
On the surface, the state of the tech industry may seem rather bleak. But, if you look beyond the headlines, you’ll find that the employment market is still full of opportunity for skilled tech professionals.
The global tech industry is still growing year-on-year, as are jobs in the field. Tech continues to represent a secure, well-paid, and highly rewarding career path.
Want more industry insights? Check out the state of UX hiring in 2023, discover how to recognise UX maturity when job hunting, and uncover what hiring managers look for in a UX portfolio.
