How Mass Tech Layoffs May Transform Mainstream Companies
Recently, Microsoft announced it was laying off more than 10,000 of its employees. Two weeks before that, Salesforce announced it would cut 8,000 employees from its roster. That same day, Amazon announced that it would lay off 8,000 employees on top of the 10,000 that it already announced in November. Also in November, Meta (Facebook) announced 11,000 layoffs.
According to tracking site Layoffs.fyi, 122 companies have laid off 37,525 tech workers in the first 18 days of this year. In 2022, 1025 tech companies laid off 154,386 employees.
For those impacted, their families, dependents and communities, this is a terrible situation, and nothing that I write here today is intended to make light of that or present it as anything other tragic.
This happened not just because of softness in the advertising market (which is a primary or significant revenue driver for the majority of today’s tech giants) or supply chain issues. It also happened because, as we all know, many of these companies purposefully over-hired tech talent over the past half dozen years, stockpiling developers, scientists and product managers as much to keep them away from their competitors than because they desperately needed that many people to build against high-priority product roadmaps.
Many of the big tech players were growing fast, running fat profit margins and had stock prices that kept going up and to the right. With the cost of capital practically free, money was everywhere, and cost-conscious fiscal discipline wasn’t the core ethos of how these companies operated.
The tech giants weren’t just keeping these extraordinarily talented and well-trained technologists away from other big tech companies (and little ones too), they were keeping them from the tens of thousands of companies operating businesses that weren’t “technology first,” but needed to embrace technology if there were going to survive and thrive in the onrushing and overwhelming digital future that now confronts them.
These companies operate in more staid, less sexy businesses -- maybe in government, nonprofits, manufacturing, service delivery, food, agriculture, construction, or hospitality, you name it. There's high potential for magic in the mixing of great tech talent wanting to work and make a difference, and tech-needy institutions needing high-quality help.
We saw tens of thousands of recently laid off Internet-trained workers make their way into mainstream companies and organizations in the wake of the dot-com bubble bursting in 2001, transforming many of those companies. I believe we will see the same thing now, but at a much more massive and faster scale. I know that this line of thinking doesn’t provide solace for those whose lives have just been upended, but it should give all of us optimism for the long-term health and vibrancy of our society and institutions.
We have long needed to democratize the haves and the have-nots of technology talent. It will be painful and dislocating for too many who don’t deserve it and did nothing wrong, but it will make a big difference in the end.
An earlier version of this blog was originally published by MediaPost.