After a big tech layoff, Silicon Valley may have lost its monopoly on workers

After a year defined by mass layoffs among Silicon Valley giants, tech workers traded the prospect of high-growth capital and home jobs for something more stable.

According to 2023 data from tech platform Karat, non-tech enterprise companies successfully hire nine out of every 10 candidates they pitch to, while large growth-focused tech companies (such as those in and around the FAANG ecosystem) hire only two-thirds of those they offers are expanding.

This difference has been increasing in recent years. In 2020, hypergrowth technology has secured more candidates, but economic volatility and the dominance of technology efforts in a number of industries have flipped the script.

“Just as there was a flight to safety for investors, it was the same for candidates,” said Jeff Spector, president and co-founder of Karat. “Candidates trade upside down for security.”

This flight to safety makes sense given prolonged high interest rates, dramatic increases in the overall cost of living, and layoffs that have — in a sense — eroded the vision of tech hubs like Silicon Valley and Seattle as places where tech talent can not only get their start, but long-term growth in your career without looking for a job. “The veil of invincibility has been pierced,” Spector said.

According to tech layoff tracker Layoffs.FYI, 584 tech companies laid off people in the first quarter of 2023. That number decreased over the year, but was much higher than in 2022, and the wound remains open. Tech companies like Google, Meta, Microsoft, Amazon, Salesforce and others have laid off 6 to 13% of their companies. In some cases, like X (formerly Twitter), half the company lost their jobs.

This week, Google announced another round of layoffs that hit engineering and hardware teams; Amazon laid off employees at its Twitch, Prime Video and MGM Studios businesses; and social media company Discord cut 17% of its workforce.

It is more than just numbers that feed the image of disillusionment. One FAANG employee wrote in a Reddit thread: “I honestly care more about the money and promotion than the job I’m doing right now.” wanting rather than striving for publicity that may or may not happen.”

According to Dice’s 2023 Tech Sentiment Report, 60% of tech workers in general are interested in leaving their jobs in 2024, up from 52% the previous year. This presents a major competitive opportunity for non-tech businesses to attract technical talent.

Non-tech businesses invite talent with the promise of stable employment that favors cash over equity that may not hold its value in the near term. In addition, they are not included in technology centers, which allows workers to live in more accessible cities and reduce commuting times.

CBRE’s 2023 report states that non-tech companies have already secured about 60% of tech talent and have not been part of a major layoff since 2022 (while tech companies account for nearly a third of the 700,000 global US layoffs). employers).

Tech workers are most in demand in the aerospace, consulting, healthcare, financial services and education industries, according to Art Zeile, the marketplace’s CEO with a career in technology. Zeile says it’s in spaces like these — non-tech businesses with major tech industries — that tech workers can find a better work-life balance and more stability than tech leaders can provide.

Despite the continued shift away from big tech, there are a few features that high-growth companies tend to provide that non-tech businesses have historically fallen short of: telecommuting flexibility and tech athleticism (aka a culture that allows for creative nudging and innovation). Despite the benefits of stability in the current economic climate, non-tech businesses still need to adapt to maintain long-term interest given what top tech talent is used to.

Spector says side tasks less focused on innovation have advantages, namely that tech workers can see more projects come to life. “There are a lot of moonshot projects, a lot of experimental projects,” Spector said of the big tech organizations. In corporate America outside of big tech, he said, “There’s a greater determination to make sure the project gets done.”

Ultimately, Zeile says, the recent layoffs have caused a jarring disruption to two decades of big tech growth. As a result, “the idea of ​​stability is much more part of the conversation today,” he said.

In his work in tech recruiting, Spector has noticed that big tech is moving to fill more international contracts in places like India, with businesses turning to domestic talent full-time. He says it’s a bit of a role reversal based on what we’ve seen historically in these two worlds. “Everybody is starting to move into everybody else’s space,” Spector said, adding that the tech talent market will continue to become more competitive as geographic wage gaps begin to close.

As artificial intelligence becomes increasingly important in job roles of all kinds – especially in technology – Zeile says we’re seeing more and more candidates move towards ensuring they have the right skills to compete in today’s and future markets work. GitHub’s Octoverse 2023 report states that 92% of all developers on the platform are using or experimenting with AI coding tools. This is just one example of technology infiltrating the minds of technical professionals.

AI or not, hiring trends show that tech workers are reshaping what it means to be successful as a tech professional, pushing aside the former definition of working for one of the world’s largest tech companies as the scope of what it means to thrive in the space.

But Spector said, “Memories are short.” He can’t say for sure if this trend will continue, but right now many tech workers have an opportunity to secure more stability while doing what they do best.