Laid off tech workers certainly face life disruptions, but they aren’t exactly like the night shift when the only factory in town shuts down. A report by ZipRecruiter determined most laid-off tech workers find a new job within three months.
The survey of October 2022 data found that 37 percent of tech workers had a new job within a month of being laid-off; 79 percent had a new job within three months.
Many laid off tech workers have a new job before they can collect unemployment: Since tech companies usually give severance, tech layoffs don’t show up much in jobless claims numbers. Elon Musk offered three months pay as an incentive for staff he didn’t lay off to quit. Perhaps he knew they would have new jobs before the severance ran out.
Tech lay-offs follow tech hiring boom: The number of tech layoffs – around 150,000 globally in 2022 – is large. Amazon just announced 18,000 lay offs. These big layoffs follow an even bigger hiring boom (though the layoffs are continuing). Meta added more than 13,000 staff in both 2020 and 2021 but has recently announced 11,000 lay offs. If Meta had hired more cautiously in 2020 and 2021 the company might not be laying off anyone now.
Tech layoffs loom particularly large in the nation’s employment statistics because few other employers are laying off workers. US employers, on average, laid off or fired about 1.9 million people each of the six months prior to the pandemic. Layoffs and firings averaged about 1.4 million per month for most recent six months. Tech lay-offs make news both because the numbers of people losing jobs is large and because tech layoffs don’t happen often.
Truce in the war for talent: If the big tech firms over the last two or three years hired more talent than they could keep busy long term, smaller tech firms and the rest of the economy have been unable to hire enough. The layoffs at big tech firms might be spreading the talent around. While about 74% of laid off tech workers found new jobs in tech, the rest are sprinkled through many industries that have struggled for years to hire the talent lured away by big tech. According to ZipRecruiter, 6% of laid off tech workers were hired in retail or ecommerce, 5% in financial services or fintech, 2% in healthcare, and the rest in a wide variety of employers, such as government agencies, aerospace companies, health systems, and retailers that have long struggled to hire software engineers, cybersecurity professionals, data analysts, and web designers.
“Had tech companies continued growing at the breakneck 2020-2021 pace, they would have monopolized U.S. tech talent and made it impossible for employers in non-tech industries to hire tech talent. Now, other industries may stand a chance,” wrote Julia Pollak, Chief Economist at ZipRecruiter.
Employment is booming generally: Total private sector US employment increased by 235,000 jobs in December and annual pay was up 7.3 percent year-over-year, according to the December ADP National Employment Report, but the labor markets vary wildly in different regions of the US. The South added 253,000 jobs but the Mountain West lost 142,000 jobs. Companies with more than 500 employees lost 151,000 jobs but smaller companies added 386,000 jobs.
It pays to change jobs: ADP data revealed pay hikes for “job stayers” in December were the lowest in the three-year series history. The sharpest declines in pay gains were in leisure and hospitality; trade, transportation and utilities; and information sectors . Pay hikes for “job changers’ pay growth also fell to the lowest level in 10 months.