The recent layoff news engulfing the tech industry is prompting an uninformed knee-jerk reaction among observers without proper context. If we take a deep breath and a step back, we find that this is less tech Armageddon and more tech correction. The insight below is brought to you by the technical staffing experts at CSS Tec. Offering solutions in New York, Georgia, Florida, Texas, Illinois, and the Delaware Valley among other locations, CSS Tec provides clients with the best technical talent on the market in this new era of opportunity. Reach out here to learn more!
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Tech is retooling, not rebuilding
When a professional NBA team reaches a crossroads where they’re not good enough to compete for a championship but too good to tank for a high draft pick, it has two options. The classic “rebuild” is a gut everything, sell everyone tanking tactic which is what a casual newsreader may equate to what’s currently happening with tech employment.
The second option is a “retool,” when a team adjusts around the fringes to self-correct on talent that didn’t pan out. This method favors fresh resources with more-complementary skillsets to star players. This is what’s actually happening right now in tech.
Despite these country-wide tech layoffs, unemployment filing remains low. Most tech companies today, even with layoffs, still employ more people than they did three years ago. The current layoffs are simply signaling a correction phase for overzealous pandemic hiring. The U.S. labor department reported that California saw 10,000 fewer unemployment benefits claims last week, a sign that the industry is returning to homeostasis. CNET backed this up by reporting that Silicon Valley still has historically low unemployment and that tech companies continue to grow.
“Tech workers aren’t filing for these unemployment benefits because of their ability to quickly find new work combined with generous severance packages,” explains Connie Testa, CSS Tec Managing Director.
ZipRecruiter noted that tech industry workers find new employment relatively quickly compared to other sectors. It reported that 37 percent of tech workers find a new role within a month and 79 percent find a new role within three months. Most big tech severance durations last as long if not longer than the three-month timeline in which 79 percent of workers found new employment giving the tech industry a cushion most others don’t have.
While these layoff headlines aren’t as damning as fearmongering, they are a bit misleading. The pandemic hiring correction and ample opportunities for those laid off from big-time industry players signal a retool. Let’s all take a collective step back and assess industry opportunities moving forward in 2023.
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