Software engineers face increasing prospects of being laid off as the tech industry begins downsizing due to economic uncertainties.
Tech work was once considered a safe bet regarding job security, with many people encouraged to “learn to code” over the past two decades.
Vox reported on April 21 that a trickle of layoffs in the tech industry last year is becoming a wave in 2023.
Tech companies saw rapid growth during the pandemic when people were stuck at home and their services were in demand.
Demand has fallen since then, and the economy has taken a beating. Recent bank failures have pushed lenders to encourage tech companies to make do with less.
The increasing use of AI bots may become a contributing factor in tech companies, as it allows coders to become more productive or by allowing them to be replaced due to lesser need for workers.
Software Engineers Hit
Software engineers are disproportionally facing the largest numbers of layoffs this year relative to other professions in the United States, according to data provided to Vox from Revelio Labs, a business data firm.
Revelio Labs data said that software engineers represented nearly 20 percent of job cuts this year, despite making up 14 percent of employees.
Revelio Labs released an earlier report in the fall of 2022 when major tech firms began the first round of layoffs.
Recruiters, HR specialists
Recruiters and HR specialists were overrepresented in these earlier layoffs, Reyhan Ayas, the senior economist who led the Revelio Labs study, told Business Insider.
“If we look at 2023 layoffs, it’s software engineers who have overtaken recruiters in layoffs,” Ayas said.
Revelio’s latest data said that nearly 5 percent of laid-off tech employees this year so far were still recruiters, the position with the most losses after software engineers.
The data firm also worked on a separate report with Business Insider’s Aki Ito last September, which found that recruiters were overrepresented in layoffs by nearly 8 percent compared to other positions.
Job cutbacks in the software engineer sector now outweigh other former positions by nearly 4 percent.
The wave of layoffs has spread from the tech industry to the finance and media sectors as well.
Lyft announced last week that it would cut more than 30 percent of its 1,200-person workforce, while BuzzFeed said it was terminating 15 percent of its staff and would end its BuzzFeed News division.
Cutting Corners in Silicon Valley
In the first quarter of 2023, nearly 20 percent of 170,000 tech company layoffs were software engineers, according to data from layoffs.fyi and Parachute List, echoing figures from Revelio Labs.
Major tech companies, like Meta, are now firing workers in key technical roles like data scientists and software engineers, which were positions that would rarely face cutbacks.
Until very recently, Meta was offering generous salaries to fill the highly desired technical positions, but now the firm is terminating them in what CEO MarkMeta calls, the “year of efficiency.”
“Leaner is better,” Zuckerberg wrote in a 2,200-word memo in March, in announcing the social media company’s second round of 10,000 layoffs in only four months.
Meanwhile, Amazon announced in the same month that it was laying off an additional 9,000 employees on top of the 18,000 people dismissed in January.
The mass layoffs in the tech sector contrast with previous ones and signal a change in where to prioritize cutting back.
“Earlier layoffs were focused on future hiring,” said Ayas, which was done to hire additional specialists like tech engineers, but now the focus is on improving business efficiency standards and boosting product revenue.
Recently laid-off tech workers may now find it harder to find new jobs with the same benefits and pay levels.
Former software engineers from Facebook might have to follow the industry’s average pay rates, which is at $90,000, far below what some of the larger firms have offered previously, in addition to bonuses and stock options.
Meanwhile, Elon Musk has let go of over 80 percent of Twitter employees. He told BBC this month that he only had left 1,500 Twitter employees of the around 8,000 staff numbered when he bought the platform last October.
Tech workers are still highly in demand, but their bargaining power and ability to ask for extra perks and salaries have been weakened.
