Are you learning to code but worried about the tech layoffs in the news?
Maybe you work for one of these companies and are concerned it might happen to you too? Or worse, maybe you just got laid off and are not sure what to do now?
Layoffs suck but they happen in every industry, and so we need to be aware of how to deal with them when they happen.
In this guide, we’re going to walk you through some tips on how to best prepare (just in case), what to do once you’ve been notified, and what to do after you’ve been let go.
It may never happen to you, but it’s always best to have a plan, so let’s dive in…
There are a number of reasons why a lot of tech layoffs are happening, but probably the biggest underlying factor is interest rates which you've probably heard a lot about in the news.
I'm no economics major and there are plenty of posts you can read to dive deeper on this but at a high level... but let me simplify.
With interest rates near 0%, companies could essentially get "free money" from investors.
Well, because investors didn't want to put their money in the bank and have it earn 0%, a a lot of money went to these high growth tech companies so that they could try and earn a return.
But now the music has stopped with central banks around the world raising rates.
This then has a knock on effect for both parties:
Since profits = revenue minus costs, the quickest way to increase profits is to reduce costs, and the biggest cost at most companies?
It's people, hence all these layoffs.
Here’s the thing though: yes layoffs are happening, but it's actually a small percentage of the workforce that's being laid off.
It's not total doom and gloom like it seems in the news.
The media thrives on getting clicks (clicks = more ad money for them) and the best way to get more clicks = fear so they always make things seem as horrible as possible.
There’s still thousands of people working at these companies, and some of these same companies that are laying off in one department, are still hiring for positions elsewhere in other departments. The reason for which, I’ll share in a second.
Not only that, but other companies outside of this layoff drama are still hiring like normal or have even raised the number of positions they have available.
Heck, the US government is hiring tech workers like crazy right now, while certain industries have literally tens of thousands of roles up for grabs.
I'm generalizing a bit but this current state of tech layoffs is less of an entire economy issue. It's more of a "big tech" / VC backed company issue.
To make matters a bit worse, some companies are taking advantage of all the layoff headlines by letting some people go to save funds while the limelight is off them and on the bigger players.
If you're a small to medium company that wants to reduce costs and lay people off, it's much easier to do so if there are other big companies doing the same, and then you can just blame "external factors".
Interest rates are a factor but COVID had a hand in this too, let me show you:
When COVID happened, there was a dramatic change in how people lived, causing a huge growth in certain digital sectors. More Amazon next day deliveries, more people streaming Netflix, etc.
Because of this, these companies saw a massive jump in sales and demand, and hired more people to meet that demand.
The problem is as they continued to grow, they kept hiring way past their needs, perhaps assuming the growth curve to continue even in a post-COVID lockdown world.
Then, as COVID stabilized and people's situations changed, they started spending less time online and more money on experiences and leaving the home. This led to the growth slowing more than expected at these companies and so they began to let people go as they weren't making any money as they thought they would.
For these particular industries, it’s less that they’re losing too much money, and more that they over hired for certain positions during that time, and no longer need them, and that sucks.
It’s not just entertainment and e-commerce that are laying people off though. Social media platforms are currently struggling because of a totally different issue.
At the end of 2021, digital privacy laws came into effect to protect consumers which is great (less targeted ads), but it meant that platforms that sell ad space started to really take a hit.
Desktop browsers came with built in ad-blockers, and then Apple added iOS9 which really affected the ad platforms, by limiting targeting of iPhone users which is almost 49% of smart phone owners.
Suddenly Facebook, Instagram, Twitter and so on were struggling to sell as much ad space, which is their main revenue stream.
They still had the users and the ad space available, but advertisers could no longer target as precisely or even specific segments of their customer base, meaning ad costs rose, and at the same time, they couldn’t accurately track conversion events, so even if their ads were working, they couldn’t tell or manage budgets.
You can still advertise but you need to put a lot of things in place to adapt. Interestingly though, there's been a huge rise in SAAS companies being created to help with these ad tracking issues, with one recently selling for 9 figures, so there’s growth here.
It’s frankly mad to me that Meta and others haven’t done this themselves to recoup their ad sales losses.
Add in the fact that some companies have new owners with wild ideas…
Such as firing the team that are designed to work around this.
So as you can see, this is less about a worldwide dip in the economy as a whole (for now) or even the tech industry struggling, but rather some large tech companies over hiring for a couple years and the industry needing to get back into balance.
The key things to understand for peace of mind is this:
Add in the fact that there are currently 1,230,765 Developer jobs available right now on Zip Recruiter and it becomes clear that tech is still a great place to work. Heck, according to the Wall Street Journal, more than 79% of tech workers found new roles in under 3 months of being laid off.
Plus there are many non-tech companies that are hiring more and more tech workers to adapt to today's world... whether that's Developers, Cyber Security experts, or many other important tech roles.
Sure, some companies are playing it safe and hiring less, but there are still roles out there and companies are still growing.
But like we said above, layoffs can still happen in every industry, so let’s walk through how to be prepared and deal with them, just in case they happen to you.
Chances are high that your company is totally fine and won't be laying off anyone, but it can be stressful seeing all this in the news and so it distracts your from your work and general enjoyment of life.
So how can you work your normal day and prepare, so you don't need to think about this all the time? Well, here are 3 simple tactics:
If you’re a platform that sells paid ad space and the government announces plans that they will create HUGE difficulties to running paid ads, then you’ve got to be aware of how this will impact your role and company.
Do some basic research and start looking at how to future proof your position and solve it, or perhaps look at other potential companies.
That doesn't mean jump ship today though. Apple announced these privacy settings way back in 2015, meaning that it took almost 6 years to implement, and the teams were working on solutions between now and then.
Staying alert to changes at your company and in your industry are important, but you can’t always see if this is happening.
Sometimes there's no early warning indicators. Some companies will give you a pay raise one day and then a new CEO will join and lay off people in the same week to increase profit margins, so be aware that no job is 100% secure.
Yes you have a contract but that’s it, and it's why the next 2 tactics are incredibly important...
Not only will this help to raise your current salary and value to your current company, but it will also increase your opportunities if you need to move roles.
You can even take it a step further and learn broader skills to help you understand your business better, along with your role, such as System Design.
Or something we always recommend doing is skill stacking. Combining different skillsets.
Finally, I feel like your parents here, but try to live within your means and save a percentage of your income.
This will give you some runway to work with if you need to move jobs or even cities. A good rule of thumb is to have enough saved to cover your daily expenses for 2-3 months or so. More is better but this is a good chunk of time and breathing room.
If you keep the above 3 tips in mind, this can help remove a lot of anxiety around your current role and any changes that may happen.
OK so your company has started letting people go from certain divisions and yours might be next.
Here’s what to do if it happens to you, and you get given your notice:
Often layoffs are simply due to bad management, and not a reflection on you, your skills or your abilities, so try not to take it personally and be kind to yourself.
I know it’s hard to do but you need to seperate any doubts about yourself and your value, if you want to move forward.
The worst thing that can happen is that you’re laid off and then still have to work in your role for a month.
It’s going to be very easy to start to freak out. If that's you, I highly recommend you take 5-10 minutes to learn about mindfulness and some basic meditation techniques to lower some of that stress.
If this is your very first tech job, you might not know this but moving companies happens a lot. In fact, moving companies to the same role is often one of the best ways to get a pay rise doing the exact same work.
Sometimes the company you’re in is limited by a set, max percentage pay rise that they can give, but can offer far more to new hires, and this happens all over. You can stay where you are for a 6% rise, or move to another company for a 30% bump!
You may come out of this far better off than you were before. Remember, you were not let go due to a lack of skills or experience, and you are valuable to other companies.
Figure out how long you can last. If you didn’t have a fund in place, go ahead and calculate your costs and what you have available. Simply by knowing how long you have, you can plan out a timeline and take the right actions, while also helping you have a little breathing room.
Do you have any holidays owed to you? What about any over benefits in your contract for the time you’ve worked so far? It could be that you can leave with a few months salary, but just make sure you get it.
It can be tempting to rush into any job that's hiring, but stop and think what you want.
Maybe you want to look at other companies or positions first? Perhaps you want to take a course and skill up for a new role instead that could pay more? Or perhaps you want to move away from VC companies to self funded?
Stop, think, breathe and plan then take action.
Update your skills and details, and then let people know you’re looking for work. With the right experience and a message of your goals on Linkedin, you may even get calls from recruiters without you having to do much else.
That’s how one of our students recently got hired in his first coding role.
Tell your friends, family, and followers on social media that you’re looking for work. Reach out to past co-workers and connections to meet up for a coffee and see if they know of open roles.
Meet up with other people that have been laid off as well. Help each other.
This can often lead to one of you being hired somewhere and then recommending you as another hire. No joke, weak network connections can pay off more than family or close personal relationships, so be sure to connect with people.
Don’t wait till you’re out of the role at your current company. Start applying for roles as soon as you’ve figured out what company you want to work for, and then go get them. Don’t wait till after you’ve finished up your last few weeks before applying.
It may even be that your current company is hiring for other departments, so look and apply asap.
Congratulations on your new job! Feel free to breathe a sigh of relief, and then just remember those before tips that we mentioned above:
Coming back after layoffs can be stressful, and even feel like you have PTSD. But if you follow these steps for your day-to-day work, it can give you that peace of mind and security for whatever happens.
Hopefully this guide has removed any anxiety with regards to the tech industry and its job security, as well as how you can deal with it. Layoffs suck and they can happen, but with a little forward planning you can be less anxious about it.
If you’ve been laid off suddenly, then follow the steps above. Take some time, breathe, and take action. There are a whole heap of companies out there looking for people with your skillset. You might get even more money, especially if you start supplementing those skills.
If you want to start skilling up (which you should), you have to make the time. By making the time to skill up, you'll become more future-proof... no matter what happens around you.
For the Developers out there, we recently released our System Design course which is key for not only moving into a Senior role, but also understanding your own role inside your company's product offerings.
That would be a great place to start your upskilling!