Remember the golden age of
working for the tech industry. Fortune is unveiling its top 100
best companies to work for. Google's number one again this
year, it was number one last year and the year before. Google
has everything - free food everywhere a Wi-Fi enabled free
shuttle. They have horseshoe pits, volleyball courts street
hockey, like you know pools. Netflix's letting you parents
take as much time off as they need during the first year of
their child's birth or adoption. Salesforce has mindfulness areas
designed with help from monks. Airbnb gives employees a two
grand travel stipend. Music discovery platform Pandora even
pays for its workers to have gender affirmation surgery. Let's pause here. It's not only
big names like Google, Apple and Amazon that entice workers with
these perks, smaller tech startups were also offering
workers outlandish extras, everything from performance
based prizes to an endless supply of company branded swag. Top performers every month to
the New York office, get an actual custom oil canvas
painting. If you pop it actually reveals a
secret room. And we have like meetings in here do poker and
maybe even close the deal have a shot of whiskey or something. Here is a must come spot for
anybody who comes to New Relic is where we have all our swag
all our New Relic pride. And the great thing is, is you can just
come and grab whatever you want. Well, that was the 2010s This is
how tech companies are grabbing headlines these days. Layoffs in technology just keep
coming. the latest Google cutting hundreds of jobs in its
engineering product and hardware divisions. So this is the latest round of
layoffs we are hearing about in tech today. It's two fintech
companies Block and PayPal. Microsoft cutting almost 2000
jobs at Activision Blizzard and Xbox as the tech landscape
resets. Layoffs in the tech industry
surged in 2023, sparked by high interest rates and a pivot to
generative AI. The pace of layoffs in the tech industry has
persisted well into 2024. Workers who were laid off now
see this industry in a different way. When you work for a big tech
company, you had this assurance that you were going to be okay
that you were part of this greater thing that you were part
of this culture that really meant something - you were
making a difference. At any moment -snap- you could be axed. Before 2020, people were
interested in the tech industry just because I mean, the high
pay prestige, I think just seeing it as different, right?
You have all these traditional companies. And then you have all
these companies that are just doing things different, and they
look like kind of the future of work, people thought it was
gonna be like a huge shift towards these fun environments
and flexible environments and places where they put employees
first. Now that sort of shifted anything. Well, these aren't too
much different than these older traditional companies that
people were already working at in the early 2000s. The tech industry as a whole has
completely lost its luster because people are starting to
recognize that the tech industry is just like any other industry.
It was up one day and now it's down. You consider what's going
on a companies like Google. Consider what's going on in the
companies like Amazon, the moment they started to announce
layoffs, people start to recognize that these companies
these tech giants are just like every other company. They hire
today and they get rid of you tomorrow. The tech industry completely
dominated the news headlines in the 2010s. After the 2008
financial crisis, the US Federal Reserve brought interest rates
to near zero and kept them there for years. That allowed tech
companies and startups to borrow money at rock bottom prices, and
open the floodgates for venture capital money too. Boosted by ultra low interest
rates and a ready supply of venture capital money and
skyrocketing adoption of smartphones and social media,
tech companies took over the stock market as well. Working at one of these tech
companies became a way to get rich. Employees often got a good
portion of their compensation paid out in stock options. As
tech stocks rose, workers got richer and richer. The tech
heavy NASDAQ for example, rose about 347% from January 2010 to
December 2019. Netflix was the biggest gainer
among the FAANG stocks surging more than 4,000%. I think for a long time working
for a major tech company like Google or Meta, Microsoft was
really seen as a badge of honor, because these were companies
that were growing tremendously. And through most of the
lifetime, for many of our current students right now in
our recent graduates, all they saw their entire childhood was
growth. They saw these companies get
larger, they saw them innovate. They saw new products that
really transformed their day to day life. So to be able to work
in those companies was seen as prestigious, and it was seen as
a very positive step in building their own careers to be able to
contribute to the technology that they themselves and their
families used every single day. People definitely look at you
differently when you have Microsoft or a larger tech
company on your resume. People have called it the easy door
into your next job or whatever. I don't know if it's that far.
But definitely if you especially if you're going to a place that
is built on Azure and you have Microsoft experience that seems
like a no brainer. Or if you have going to somewhere that's a
Google based company, you have Google on your resume or Amazon,
I think it probably puts you towards the front of the line. When COVID-19 began, the economy
initially struggled, but the tech industry thrived. The Federal Reserve's swift
actions, such as cutting interest rates back to near zero
boosted tech stocks. This in turn led to an increase in tech
jobs, primarily as people stayed home. However, tech stocks took a hit
once the Fed started raising rates in 2022. So the industry
started using mass layoffs as one of the many ways of belt
tightening. Wall Street loved this move, reflected in the
bounce in tech stocks in 2023. The tech heavy NASDAQ climbed to
43% in 2023, its best years since 2020. In the pandemic, the tech
industry saw some pretty big pickups in job posting games on
Indeed platform. We saw really strong hiring. People were at
home, they were consuming more kind of these tech goods and
services. And many tech companies adjusted to that and
hired more workers. So we saw a big run up in
2021-22. And then in 2023, we saw some of that demand start to
kind of cool down and soften. In 2024, so far, we've seen
somewhat similar to 2023, some layoffs being announced, we've
seen kind of a continuation of pull back and job postings in
the tech industry. But again, a lot of these
layoffs that we've seen so far this year in 2024, have really
been about right sizing and adjusting to a world of post
Covid consumer demand and trying to figure out what does the
world look like after Covid. So, a lot of it really comes down to
businesses making moves to really understand, you know,
where their consumers are, and trying to fit their workforces
to that demand. Now we see the stock market
reacted quite favorably to this round of layoffs. We see these
record stock prices for a lot of these tech companies. The
investors really favored profitability, really favored
this lean year that these tech companies had. And so instead of
rewarding the growth that we saw in them all pursue years ago,
they're now rewarding profit. And so the layoffs have
continued, people have become used to them, and regrettably,
and sadly, it seems that the layoffs is going to be the new
normal. Layoffs in tech show no signs of
letting up. In fact, more and more companies have embraced
quote, efficiency, as a common mantra in recent earnings calls. A memo sent out by Elon Musk to
the staff outlining that the company will be cutting more
than 10% of its global staff. Layoffs are the first for Apple
since the pandemic and come shortly after the company
shuttered its self driving car project. Amazon is cutting hundreds of
jobs from its cloud computing division Amazon Web Services. Even though mass tech layoffs
continue dominating headlines, the labor market still seems
strong. The US economy added 303,000 jobs in March well above
the Dow Jones estimate for a rise of 200,000 with the
unemployment rate edging lower to 3.8%. The tech layoffs have prompted
new workers to seek other opportunities according to
Handshake, a popular free job posting site for college
students and graduates. So the share of tech majors job
applications submitted to internet and software companies
dropped by more than 30% between November 2021 and September of
2023, while the share of applications submitted to
government jobs, more than doubled. And part of the reason why this
is happening is because stability is such a major factor
in student's decision around what types of jobs they apply to
and what types of jobs they accept. 77% of this recent class
of 2024 cares about stability as the number one factor. And the
government, for example, is an entity that provides a strong
level of stability, whereas they're looking at the headlines
and the news. And they're paying attention to all of the layoffs
that are happening in Big Tech. And that makes them feel
unstable. The layoff pandemic is not
necessarily impacted tech the way we thought it was - largely
because of the fact that these jobs still pay really well. And
there's still a degree of luster. It's not nearly as
exciting as it was 20 or 30 years ago. But it's still
exciting. And people really want that bullet point on the resume.
Even if they only lasted a Google, for let's say six months
or a year, they can still say they work there. I think what
we're starting to see ultimately is that people are starting to
consider other options. Whether they're deciding that once they
get their degrees, they're going to go create their own
businesses, they're going to get government space, they're going
to get in other industries, where there is a need for their
technical skill set where they can essentially be a big fish in
a small pond, which in many ways gives them job security that
they don't necessarily get in the tech industry. People that are wanting to work
in tech and wanting to still stay in tech. I think we just
have to be a little bit more careful, and little bit more
guarded about keeping our options open and not feeling the
need to be extremely loyal and dedicated to one company.
Because they surely are not dedicated and loyal to us, no
matter what your manager no matter what your director is
saying, no matter what praise you're getting, it doesn't
really matter sometimes at the end of the day, at a lot of tech
companies, unfortunately. These layoffs have, to an extent
hurt the luster of the tech industry, but not to the point
that I think that people all of a sudden are going to decide not
to go work for them anymore. But even we consider that recent
college grads, five years ago, they couldn't wait to go to work
for the big tech industry. But now they're considering
things whether I go to tech, whether I go to government,
whether I go someplace else, I want to go someplace where I
feel like I'm part of something bigger than myself. Tech companies are just not
offering that anymore, because they're not necessarily
disruptive. And I'm talking the big giants. I'm talking about
the Amazons of the world, the Microsofts of the world, the
Googles of the world. They're not seen as disruptors. Now
they're seen as more established companies. To the people who are chasing
like a tech dream job, I think, keep your options open and be
realistic. Don't just focus on one company and feel like you
have to get into that one company because it's the dream.
Pay attention to the other ones. Pay attention to smaller
companies. There's a lot of really good smaller companies
that are not in the headlines that are great places to work,
but also don't hold back. Drive towards something and have a
goal. Just temper your expectations. I think the glory days of the
tech industry will certainly continue to flow back into the
existence in the eyes of our early talent. I think it will
look different as it continues to evolve. I think the values
and the needs and the desires of our early talent will continue
to change as the macro economic situation around them also
changes. And I think Big Tech if they want to remain an
attractive option for early talent will need to continue to
evolve their workplace, their expectations and their benefits.
