From 2007 to around 2022, the tech industry enjoyed a mind-boggling period of growth, with companies like Apple, Microsoft, and Alphabet reaching trillion-dollar valuations. Fed by a firehose of investor dollars, tech companies used their cash to hire the best and brightest talent available – not only in software development, but also in fields like marketing, finance, and human resources.
But now that investors are questioning the tech industry’s ability to continue growing, tech companies are doing something they haven’t needed to do for decades: lay off employees and cut budgets down to what any other industry would consider “reasonable.” And the result is that nearly half a million highly qualified tech industry employees are now searching for new jobs.
So, what’s behind these mass layoffs, and how can hiring managers in other industries take advantage of this unprecedented opportunity for talent acquisition? Let’s take a look.
Why is the tech industry laying off so many talented people?
Long story short: tech companies were massively overstaffed. Google CEO Sundar Pichai acknowledged as much in a 2023 memo announcing the layoffs of 12,000 employees: “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
Over the previous decade and a half, tech companies were hiring employees ahead of anticipated growth, or simply to block competitors from acquiring talent (as one former Meta employee said on TikTok: “It kind of seemed that Meta was hiring people so other companies couldn’t have us… they were just kind of hoarding us like Pokémon cards”).
Now, tech companies are being forced to face reality and trim their headcounts – though some have been less transparent about layoffs than others.
One tool that companies have used to slim their ranks without officially firing people is “Return-to-Office” (RTO) mandates. While industry leaders like Mark Zuckerberg insist these mandates are driven by performance data, studies from Harvard Business Review, Boston Consulting Group, and others have shown that companies with more permissive remote work policies have grown profits at twice the rate of those with more restrictive policies. This dissonance supports the idea that IBM, Amazon, and others are using RTO mandates as a cynical way to coerce remote workers into resigning – thus obscuring the full scale of layoffs from shareholders.
What’s the opportunity for everyone else?
Whatever the reason, tech companies are releasing a huge number of highly skilled people into the labor market. And, again, it’s not just developers – research from 365 Data Science has indicated that 27.8% of laid-off tech sector employees were in HR & Talent Sourcing, 7.1% were in Marketing, and 4.4% were in PR, Communications & Strategy. The same report found that the average laid off tech worker had nearly 12 years of work experience.
This represents a once-in-a-generation opportunity for employers in other industries to attract extremely qualified talent that had been siloed in tech for years.
What’s the catch?
For one thing, these workers are accustomed to working for some of the most recognized brands on the planet. Let’s face it – unless you’re Google, Microsoft or Meta, you’re not Google, Microsoft or Meta (but if you are, please give us a call). Highly qualified ex-tech workers probably don’t want to uproot their lives, move to your town, and live in a camper van in your parking lot (as many Googlers did) just for the honor of working for you.
Tech workers are also accustomed to inflated paychecks. While the tech industry just saw its largest year-over-year salary decline since the pandemic, they are still far better paid than workers in most industries, and a McKinsey report found that more pay was the number one motivator for tech workers seeking new jobs.
Finally, your organization won’t be the only one courting tech industry alumni. TA ZipRecruiter report found that 37% of laid-off tech workers find work within one month of leaving their job – and that number rose to 79% by the three-month mark. And in some cases, you might even be competing for these workers with the same companies that fired them, as companies like Meta and Salesforce have been trying to rehire former employees they dismissed too hastily.
Why is remote work one of the best ways to attract displaced tech workers?
So, how can you make your workplace attractive to displaced tech superstars? Well, you could start by considering what workers themselves are saying about their priorities.
While studies by Qualtrics, McKinsey, and others found that company values and development opportunities were important to ex-tech industry workers, the single most important factor (after pay) is a flexible remote work policy.
According to McKinsey an overwhelming 77% of tech workers preferred full-time remote work. Separate data from Morning Consult found that 63% of tech workers were not interested in returning to full-time in-person work at all. And older, more experienced tech workers were more likely to rate remote work as a top priority.
Unsurprisingly, employers that offer fully flexible work options have been adding headcount more than twice as fast as companies who insist workers relocate. And given how fast displaced tech workers are finding new jobs, this creates a huge advantage for remote-friendly employers.
Whether your organization has been actively recruiting tech industry veterans or is just entering the recruiting fray, hopefully this article provided some insights on how remote work can enhance your employee value proposition. And if you need help building your managers’ skills for leading productive remote teams, please consider reaching out to Sonata Learning for a consultation.