Adapting to Change: Layoffs in Tech and the Promise of 2024

It’s a new year but some are already saying the outlook looks very similar to 2023. After layoffs in tech hit unprecedented highs over the last couple of years, I think we were all hoping that we were through the worst of it and could approach 2024 with a little more optimism. However, the first full working week of 2024 has seen a fresh wave of layoffs that started with Amazon, and ended with Google, Twitch and Discord employees, amongst many others, facing the axe. In total, it’s estimated there have been 4,500 tech layoffs in 2024 so far, which has left many people wondering if we’re in for more of the same over the next twelve months. We’re going to look at what happened in tech layoffs in 2023, and what we think it will be like in 2024. Don’t worry - it’s not all doom and gloom!

First, let’s look at what’s happened over the last couple of years. It’s estimated that tech layoffs have effected over 400,000 workers in 2022 and 2023, with approximately 262,000 laid off in 2023 alone.

We saw sweeping cuts at some of the biggest names out there, including Meta, Amazon, Spotify, and Microsoft, going directly against the trend of consistent and constant growth and prosperity seen previously at the biggest players in tech. We won’t even go into the debacle surrounding Mr Musk and the artist fka Twitter.

These cuts weren’t insignificant either - it’s estimated that Meta cut around 13% of their workforce in total - and they weren’t confined to specific projects, sectors or roles; they encompassed the entirety of big tech and had a significant impact on the tech landscape.

These layoffs were, at least partly, in response to the fallout from the Covid pandemic that swept the globe in 2020. After years focused on growth, where increasing your workforce was seen as an indicator of success, companies realised these inflated workforces weren’t necessary, and streamlining operations and shifting the focus to profit made more sense in the post-Covid economic landscape. For example, Meta let around a quarter of their workforce go and shifted their focus towards high-impact projects and efficiency, which impacted teams developing relatively minor improvements. Amazon and Microsoft also cut thousands of roles each, with a changing market landscape and economic slowdown taking its toll.

We also have to consider the developments in, and subsequently, the impending threat that AI holds over the tech landscape. Progress came at a rapid pace last year, so much so that it was evident long before the end of 2023 that an AI capable of replacing people at work was not far away. Tech companies, particularly big tech companies, will be acutely aware of the imminent impact of AI and may be making pre-emptive moves to accommodate it, particularly with the current economic landscape and the pressure on companies to squeeze profit wherever they can. With the economic and technological advantages of AI obvious, it’s likely we’ll see more layoffs due to this in the future, particularly if it continues to progress at the pace it has over the last couple of years.

Despite the challenges seen in 2022 and 2023, the next 12 months definitely hold hope for recovery. Companies are still hiring, albeit with more of a shift towards contractors and very specific skill sets, and there is undoubtedly still a high demand for skills such as software development and data science. Furthermore, the digital transformation for traditionally ‘non-tech’ companies and sectors continues to pick up pace, opening doors in industries that techies would never have previously considered, such as retail, insurance, and hospitality, that now require expertise in areas such as modernising business processes, optimising user experiences, and leveraging data-driven insights. This digital transformation isn’t slowing down any time soon, and the number of opportunities in areas not traditionally considered by techies will grow significantly.

Big Tech companies, despite the recent wave of layoffs, are far from being sidelined in the tech employment landscape. In fact, they continue to actively recruit, albeit with a shift in their hiring strategies. Recent trends show more of a focus on contract roles, which reflects changes in the tech hiring landscape in general, where flexibility and adaptability are becoming increasingly valuable. In a move away from the more ‘open door’ policy seen over the last couple of years, niche skill sets have risen in popularity, as big tech companies seek devs that can quickly deliver innovative and high-impact solutions. For techies that still want to work in big tech, the opportunities are there - as long as you’re willing to be flexible, and have the desired skillset.

Whilst the majority of this makes it sound like 2024 is going to be another challenging one for techies, there’s an argument to be made that the reality is quite the opposite - it’s an opportunity to shine and diversify your skills. Recent layoffs may make it look like the demand for tech skills is diminished, but we know this isn’t the case. Instead, they’ve spread across a wider range of industries, many of which haven’t been previously considered viable destinations for techies. The scope for applying tech skills is more vast and varied than it has ever been, and developers are now in a unique position to explore roles outside ‘traditional’ tech companies - companies that were once not considered tech-centric, but are now on the forefront of digital innovation. This transition opens up a world of possibilities for developers to apply their skills in new, exciting contexts.

Job security in tech could be looked as having always been ‘dynamic’, with the average tech employee tenure being around three years. The recent layoffs and shifts in the tech landscape have only served to underline the importance of adaptability and continuous learning. Developers who keep up with the latest technologies and are willing to venture into new domains will find themselves well-equipped to navigate the changing job market. Developers should see this as an opportunity to broaden their horizons, enhance their skill sets, and remain flexible in their career paths. After all the negativity of the last couple of years, it’s evident there’s cause for hope. The layoffs of 2023, while presenting immediate challenges, are paving the way for a more diverse and resilient tech landscape in 2024. For computer developers, this is a time to leverage their skills, adapt to new environments, and explore the myriad opportunities that lie in both traditional and non-traditional tech sectors. The future is not about surviving - it’s about thriving in a world where technology continues to redefine possibilities.

TL;DR - The outlook's nowhere near as grim as you might think from reading the headlines. It's time to look at companies you might not have considered previously and really hone your skills to ensure you continue to thrive in tech. You've got this!