‘It is an employer’s market’: Tech layoffs may have turned the Great Resignation into the Great Recommitment

On Friday, Alphabet Inc.’s Google was the latest tech giant to add to the uncertainty, announcing the elimination of 12,000 jobs just two days after Microsoft Corp.
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announced it was cutting 10,000 positions. The two join a long list of companies that have announced layoffs in recent months, including Salesforce Inc.
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Facebook parent Meta Platforms Inc., Amazon.com Inc.
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Cisco Systems Inc.
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Intel Corp.
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HP Inc.
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Coinbase Global Inc.
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Spotify Technology Inc.
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and Snap Inc.

For more: A MarketWatch tally of tech companies laying off thousands of people

As laid-off workers struggle to land new jobs, many executives believe that could make people more willing to stick with their current companies. Former Cisco Chief Executive John Chambers sees it this way: The Great Resignation, in which tech workers jumped from one high-paying job to another, has turned into the Great Recommitment.

“A career used to be two years at a company. That was the case for more than a decade,” Chambers, who is now a venture capitalist, told MarketWatch. “Now, the last hired is the first fired. There has been a shift to employees re-evaluating their commitment to companies, with an emphasis on culture. There is dramatically lower turnover.”

But while tech executives foresee a renewed commitment to jobs, rank-and-file workers see escalating tensions amid job cuts, mandates to work at least three days a week in the office and expectations of higher production with fewer resources. They say they are now more inclined to stay with their employers and forgo the job-hopping of the past few years, rather than undertaking a job search that could last as long as a year amid fewer openings and increased competition.

“There is anxiety in competing with Big Tech folks, because I think that their profile is a ‘safe’ bet for scared companies, who may be less willing to take chances on people not coming from established brands,” said Alex Gammelgard, a San Francisco-based marketing executive who previously worked at TrustedHealth. In her months-long search for a job, Gammelgard told MarketWatch, she has “found that pretty much everything shut down” since Thanksgiving.

“I am seeing on LinkedIn that a role will have 100 to 500 applicants within a week, which is way more than normal, so that shows the impact the Big Tech layoffs are having,” she said.

In all, more than 56,500 tech jobs — nearly all of them in the U.S. — have been cut already this year, according to data from Layoffs.ai, and more layoffs are coming. In 2022, there were 97,171 job cuts, up 649% compared with the previous year, consulting firm Challenger, Gray & Christmas reported.

Also read: ‘It was not sustainable or real’: Tech layoffs approach Great Recession levels

The sudden purge of tech jobs has engendered misgivings about employers after years of perks and breakneck hiring. Some 69% of those recently laid off did not receive any form of support from their former employers, and 60% said they are less likely to trust their next employer, according to a late November survey of 2,162 U.S. workers by BizReport.

“Once Meta announced it was cutting 11,000 [in November], others in Silicon Valley soon followed,” Bateman told MarketWatch. “It seemed to open a floodgate; they were just waiting to cut.”

‘Muskification’ is changing the outlook

The layoffs are likely to continue, tech executives caution, as companies scale back operations amid slackening sales. Workers who have been laid off by smaller firms face the prospect of competing for jobs against the tens of thousands of ex-Big Tech employees now scouring employment sites.

Todd Erickson has applied for 70 openings since being let go from startup Phase Change Software in October, after six years with the company. He has heard back about only 10 of those jobs.

“It’s been a rough few months,” Erickson told MarketWatch. “I had a do-whatever-needs-to-be-done role, including tech writing, legal work and web development, and didn’t develop an expertise that would be helpful in this job market.”

Adding to the frustration are listings on job sites that appear to be nothing more than “fishing expeditions,” nonexistent openings by employers looking to find talent unrelated to the specific job description, Gammelgard and others said.

First Take: Big Tech layoffs are not as big as they appear at first glance

One consequence of the current employment meltdown in tech is that some job seekers may have to look for work outside the industry, Schiffer predicted. “The ‘Muskification’ of compressing work staffs has tech companies rethinking human-capital deployment,” he said, referring to Elon Musk’s moves since buying Twitter in October. “We are in a cycle of contraction after years of overstaffing.”

“The story of 2023 is a push for more value and efficiency,” said Freshworks Inc.
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CEO Dennis Woodside, a veteran of Google, Impossible Foods Inc., Dropbox Inc.
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and Motorola Inc.

The elimination of the 22,000 Google and Microsoft jobs last week “compounded the problems for tech job seekers” who aren’t developers or programmers, Eric Schiffer, CEO of private-equity firm Patriarch, told MarketWatch. “There is a lot more pain to come.”

Tech workers may be more needed at nontech companies

The news isn’t all bad, though. Other industries covet tech workers, according to economic experts, and the job market remains strong, with the unemployment rate at a decades-low 3.5% in December, according to the Job Openings and Labor Turnover Survey, which is reported monthly by the U.S. Bureau of Labor Statistics. Even Silicon Valley added nearly 13,000 workers in December and had an unemployment rate of 2% that month, according to an analysis by Joint Venture Silicon Valley’s Institute for Regional Studies.

“The other point I was trying to make for two years [was that] the rest of the economy was tech-starved,” said Federal Reserve Governor Christopher Waller at the Council of Foreign Relations in New York on Friday. “They couldn’t get enough tech workers. So you know, guess what? Now there’s a bunch of tech workers available for the rest of the economy to hire to get the stuff done.”

He added: “So I think there’s going to be a fair bit of reallocation of tech talent across the rest of the economy, unlike maybe some other sectors.”

Damien Daurio, who lost his job at DirecTV last summer, found work as a software contractor for Charles Schwab Corp.
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with help from recruiters and placement companies. Because of his skill in shepherding software projects, Daurio said, finding another job was easier than it might have been for a nontechnical position.

Meanwhile, others who recently left tech jobs see opportunity in the current climate. Donna Estrin left the cybersecurity industry in October and started a consultancy in November. “My thinking is if people are let go, companies will hire contract workers and not replace full-time workers,” she told MarketWatch. “Companies still need to get the work done, so they will need consultants.”

But other job seekers aren’t having the same success. The outlook is “pretty barren,” said Erickson, who has put off knee surgery because he lacks full-coverage health insurance. “I just applied to Microsoft,” he said, “but I doubt that works out, with 10,000 layoffs.”

MarketWatch staff writer Gregory Robb contributed to this article.