Tech layoffs shock young workers. The older people? Not so much

SAN FRANCISCO When Lyft laid off 13 per cent of its workers in November, Ms Kelly Chang was shocked to find herself among the 700 people who lost their jobs at the San Francisco company.

It seemed like tech companies had so much opportunity, said Ms Chang, 26. If you got a job, you made it. It was a sustainable path.

Mr Brian Pulliam, on the other hand, brushed off the news that crypto exchange Coinbase was eliminating his job. Ever since the 48-year-old engineer was laid off from his first job at the video game company Atari in 2003, he said that he has asked himself once a year: If I were laid off, what would I do?

The contrast between Ms Changs and Mr Pulliams reactions to their professional letdowns speaks to a generational divide that is becoming clearer as the tech industry, which expanded rapidly through the pandemic, swings towards mass layoffs.

Microsoft said this week it planned to cut 10,000 jobs, or roughly 5 per cent of its workforce. And on Friday morning, Googles parent company Alphabet said it was cutting 12,000 jobs, or about 6 per cent of its total. Their cuts followed big layoffs at other tech companies such as Meta, Amazon and Salesforce.

Millennials and Generation Z, born between 1981 and 2012, started tech careers during a decade-long expansion when jobs multiplied as fast as iPhone sales. The companies they joined were conquering the world and defying economic rules.

And when they went to work at outfits that offered bus rides to the office and amenities including free food and laundry, they were not just taking on a new job; they were taking on a lifestyle. Few of them had experienced widespread layoffs.

Baby boomers and members of Generation X, born between 1946 and 1980, on the other hand, lived through the biggest contraction the industry has ever seen. The dot.com crash of the early 2000s eliminated more than one million jobs, emptying Silicon Valleys Highway 101 of commuters as many companies folded overnight.

It was a bloodbath, and it went on for years, said Mr Jason DeMorrow, a software engineer who was laid off twice in 18 months and was out of work for more than six months. As concerning as the current downturn is, and as much as I empathise with the people impacted, theres no comparison.

Techs generational divide is representative of a broader phenomenon. The year someone is born has a big influence on views about work and money. Early personal experiences strongly determine a persons appetite for financial risk, according to a 2011 study by economists Professor Ulrike Malmendier of the University of California, Berkeley and Professor Stefan Nagel of the University of Chicago.

The study, which analysed the Federal Reserves Survey of Consumer Finances from 1960 to 2007, found that people who came of age in the 1970s, when the stock market stagnated, were reluctant to invest in the early 1980s when it roared. That trend reversed in the 1990s.

Once you experience your first crash, things change, Prof Nagel said. You realise bad stuff happens and maybe you should be a bit more cautious. More On This Topic ST Explains: Will tech job cuts lead to broader cuts? Can laid-off workers be easily rehired? Googles parent Alphabet cutting 12,000 jobs For Gen X, the dot.com collapse hit early in their careers. From 2001-05, the tech sector shed one-quarter of its workers, according to an analysis of US Bureau of Labour Statistics data by CompTIA, a technology education and research organisation.

The layoffs that swept the industry were worse than the recession of the early 1990s, when total jobs in the tech sector fell by 5 per cent, and the global financial crisis in 2008, when the workforce contracted by 6 per cent.

In 2011, the tech sector began a hiring boom that would last a decade. It added an average of more than 100,000 jobs annually, and by 2021, it had recouped all the jobs it lost when the dot.com bubble burst.

The job figures account for software, hardware, tech services and telecommunications companies, including Apple, Meta, Nvidia and Salesforce.

But they may exclude some tech-related companies such as Airbnb, Lyft and Uber because of ambiguity in government labour market reporting that classifies some businesses as consumer services, said Mr Tim Herbert, chief research officer at CompTIA.

The biggest job increases in tech came after the pandemic started, as companies rushed to meet surging demand. In 2022, the sector added nearly 260,000 jobs, according to CompTIA, the most it had added in a single year since 2000.

Techs job increases continued in 2022 even as big layoffs started, though it is unclear if that trend has stretched into 2023. New job opportunities were a factor as nearly 80 per cent of laid-off tech workers said they had found a new job within three months, according to a survey by ZipRecruiter.

Were seeing the hiring mania of the pandemic being corrected for not the popping of a bubble, said Mr Andy Challenger, senior vice-president of career transition firm Challenger, Gray & Christmas. More On This Topic Tech layoffs send temporary visa holders in US scrambling for new jobs Big Techs layoff wave an outlier in still-robust job market Last autumn, Dr David Hayden, a programme manager with a doctorate in physics, learnt from his manager that he would be let go from nLight, a semiconductor company. Worried about how he would pay his eldest daughters college tuition, he immediately reached out to recruiters to line up interviews. In December, a month after being let go, he started a position at Lattice Semiconductor.

In each interview, Dr Hayden, 56, volunteered that he had been laid off, he said. His experience during the dot.com crash, when he avoided layoffs even as talented colleagues were let go, taught him that cuts are not always rational.

The shame of being laid off is gone, said Dr Hayden. Companies know that a lot of good people are being let go right now.

Ms Erin Sumner, a software recruiter at Facebooks parent company Meta, used to brag to potential hires that the company had been the fastest ever to be valued at US$1 trillion (S$1.32 trillion).

She said she would promote the companys strengths, even last year, as its stock price tumbled and its core business, digital advertising, struggled. Meta let go of 13 per cent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs in 2022. PHOTO: NYTIMES When rumours of layoffs began to circulate last year, she assured colleagues that their jobs were safe, pointing to the more than US$40 billion in cash the company had in the bank. But in November, she was among 11,000 workers laid off.

It was gut-wrenching, said Ms Sumner, 32. She has found a new job as the head recruiter for DeleteMe, a start-up that aims to remove a customers information from search results. But she said she cringed each time she read about more tech layoffs.

I fear its going to get worse before it gets better, Ms Sumner said. Theres no guarantee. I got laid off by the most secure company in the world.

A similar reversal of fortune has challenged businesses selling software services. Shares of Salesforce, an industry leader, fell nearly 50 per cent last year as its sales growth slowed. The company had splurged during the pandemic, spending US$28 billion to buy Slack Technologies. It swelled to 80,000 employees from 49,000 in two years.

During an ll-hands meeting last week to discuss the companys decision to lay off 10 per cent of its workers, Mr Marc Benioff, the companys chief executive, tried to sympathise with his unhappy staff by putting the cuts in context.

Ive been through a lot of difficult times in this company. Every loss reawakens another loss for me, he said, according to a recording of the call heard by The New York Times. Obviously, were talking about a layoff. I think about employees who have died. I think about people weve lost that we never wanted to lose.

Asked what advice he had for employees who were anxious about the state of the company and further layoffs, Mr Benioff suggested gratitude. NYTIMES More On This Topic Singapore still has plenty of tech jobs amid layoffs worldwide: Ng Chee Meng Dyson tech institute awards engineering degrees, pays a salary and guarantees a job