The effect of widespread tech layoffs on the next years job market

The holiday season used to be a time of joy, fun, and laughter for everyone, but not this year. Right after Halloween, big businesses started massive layoffs in the scale of thousands. As a result, Americans are dreading this Christmas season in anticipation of more layoffs to come.

Elon Musk was one leading figure who conducted a large-scale layoff, letting go of half of Twitter’s staff. Corporate giants like Amazon, Meta, Asana, Stripe, Cisco, and Upstart also have scaled down their workforces, and are planning for more in the future. These are only a few names of employers who laid off workers in the past month.

The scale of these layoffs differs by company. Meta laid off 13% of its staff, amounting to 11,000 employees. Cisco has announced plans to let go of 4,100 workers, 5% of its staff. These pink slips coupled with Musk’s drastic restructuring of Twitter’s culture and staff will lead to the same end result. Unemployment for thousands of well-educated and well-paid workers. They will be out in the job market, searching for good opportunities at a time when almost every company has announced hiring freezes.

Let’s look at the best-case scenario. The news of potential layoffs will cause a massive wave of layoff anxiety among the American population. After a few months, most of the affected will calm down. But the large number of workers being laid off and the rising number of employees reducing headcount suggest otherwise. Most of the employers who decided to conduct these layoffs cite the dwindling economy as the reason behind their actions. Over the last year. The tech industry has lost 7.4 trillion dollars.

Tech companies are not facing the consequences of their rapid hiring during those pandemic months when technology was used for almost every task during lockdowns. Between November 2020 and August 2022, nearly 500,000 new jobs were added to the tech sector, according to CompTIA’s Tech Jobs Report. Companies started to become affected by the financial burdens of their growing staff this year due to rising inflation.

Tech employers had to search for ways to get a grasp of their spending for the first time in a few years. Their first solution? Laying off the slack. Mark Stoeckle, Adam Firms’ Chief Executive, puts it as, “Negative productivity can be hidden when everything is going great.”

Economists are warning us about an inevitable recession in the coming year, which makes it hard to predict the scale and duration of these layoffs. HP Inc. plans to let go of 4,000 employees by the year 2025. Amazon has announced plans to pause hiring in early November. Although the total number of these tech layoffs is not exactly known, many news sources have placed it at 10, 000. Amazon CEO Andy Jassy says that they plan to lay off more workers in early 2023.

It is difficult to predict the job market situation in 2023 when we consider everything that is going on around us. The rising layoffs will hike the number of tech workers looking for the few new jobs advertised by the minority of companies who will be hiring. CompTIA reports that there were over 300,000 tech jobs available in the US in October. This lets us speculate that the laid-off workers can still have their pick where they want to work. Fresh talent will naturally gravitate toward more stable employers. These speculations will not bring you much relief if you are currently unemployed. If you have no idea what to do next while searching for a job, read this article.