'This is the start of a sea change': How tech layoffs are transforming the job market

‘This is the start of a sea change’: How tech layoffs are transforming the job market

A sampling of GeekWire headlines from the past month.

After nine years in technology marketing in Seattle, growing from individual contributor to manager, James Carroll decided earlier this year that he was ready for a break to refresh his outlook and relaunch his career.

Like many others, he had spent his 20s and early 30s in a booming tech industry defined by seemingly limitless expansion and endless job opportunities.

Working with a career counselor, Carroll made sure his household finances were in order and gave ample notice of three months to the startup where he worked. He planned to take a few months off, explore new areas of marketing or even a new area like cybersecurity, before getting back into the workforce.

Tech marketer James Carroll has returned to a very different job market than when he took a sabbatical earlier this year.

The reality he now faces is not at all what he expected.

“I might need to tap into those savings for a while because I might be out of work longer than I thought,” he said. “It shows how quickly the market, the economy and personal situations can change.”

The sky isn’t falling for the tech industry. The thousands of layoffs over the past two months represent a small fraction of the tech sector’s growth over the past two decades. But cutbacks and hiring freezes are suddenly turning the job market into a condition some in the industry haven’t experienced in their careers.

Here’s how.

The balance of power has shifted from job seekers to tech employers. For some time, there have been more technology jobs available than people qualified to fill them, putting experienced engineers and technicians in a strong position when looking for work and negotiating salaries.

It may seem like forever, but it’s only this year that Amazon, Microsoft and others have increased compensation to keep pace with inflation and retain employees.

Compared to that, the past few weeks feel like an alternate reality.

“For the first time in more than a decade, Seattle’s tech scene has transformed into an employer-driven marketplace,” said Albert Squiers, managing director of the technology practice at Seattle-based staffing firm Fuel Talent. Seattle.

There are parallels to what happened in the housing market, where the balance of power shifted quickly from sellers to buyers, said Doug Sayed, founder and chief executive of Applied HR Strategies Inc., a company compensation consultancy based in Seattle. Companies looking for talent are in a much stronger position.

“I think this is the start of a sea change,” he said. “It happened very quickly.”

Companies that are still hiring have a better chance of landing tech talent. This sudden reversal may be unsettling for tech workers, but it provides relief to startups and other companies that previously competed with Meta, Amazon, Twitter and Microsoft for key hires.

“Based on the conversations I’m having, there are still plenty of companies with big hiring plans in the first quarter — these might not be the names we’re used to seeing,” Squiers said. .

Not only have many of these big companies frozen hiring, but thousands of their former employees are now looking for jobs.

“This is potentially a good thing for well-funded and/or profitable small and medium-sized businesses. [companies]that more people are coming into the market and more people are going to look for work,” Sayed said.

Non-tech companies benefit. Job offers from big companies like banks and insurance companies are accepted more often than those from fast-growing tech startups, according to data from Karat, a Seattle-based startup that helps companies conduct interviews techniques.

The components of compensation will change for some workers. There hasn’t been an overall drop in tech salaries yet, but those moving from tech giants to smaller startups shouldn’t expect the same level of pay, in general, Sayed said.

Compensation components will also change for those who move from a public company that offers equity compensation to a startup that offers stock options but no short-term ability to cash them out.

Openings fill up faster. In recent years, most companies have aspired to a 60% close rate, which is the percentage of applicants who accept job offers, said Jeffrey Spector, president and co-founder of Karat.

Over the past two quarters, Karat has recorded a 70% close rate for the best candidates on offers from the companies it works with.

“Candidates are still finding jobs, but they’re not as likely to receive multiple competing offers as they were a year ago, giving small businesses more opportunities to hire top candidates,” Spector said.

“You’re going to start seeing candidates with the right level of experience applying.”

Sandy Matus, Textio

The quality and level of experience of candidates on the market has increased significantly. Karat says the percentage of engineering candidates who meet the standard hiring bar is rising after a year of decline and is now 25% higher than normal. Spector said this “indicates a very large labor pool.”

Just three months ago, companies were seeing an increase in job applicants, but not consistently receiving applications from people with the right experience. That promises to change now, said Sandy Matus, director of human resources at Textio, the Seattle startup whose technology identifies biases in workplace communication.

“You’re going to start seeing people with the right level of experience applying,” Matus said.

Increase in number of experienced candidates could limit options for others looking to expand into new areas. “It can be difficult to jump into a new field,” Matus said. “It’s not impossible, but it can be more difficult because you’re competing against people who have experience in this area.”

Remote work creates new opportunities. Recruiters say they are seeing more and more Seattle-based engineers joining companies headquartered out of state, without relocating. This was the exception rather than the rule in past recessions.

Sudden job losses are only a small part of long-term growth…so far. Employment in Washington state’s information industry, which includes many tech jobs, fell 5,900 jobs or more than 3% in mid-October from the previous month, according to the State Department of Employment Security data.

In raw numbers, it was the largest overall monthly decline in the state’s news sector history, according to ESD data. And that doesn’t include several high-profile layoffs announced in late October and early November, said Anneliese Vance-Sherman, regional labor economist with the Department of Employment Security.

The drop in the top right of the graph corresponds to the loss of 5,900 jobs in the information sector in mid-October. Source: Washington State Department of Employment Security.

However, this is against a backdrop of massive growth over the past two decades.

“From my perspective, it remains to be seen if this is a blip or a game changer, but there are still great opportunities, and we live and work in a community with great talent. technical,” said veteran technical recruiter Jason Greer. , Managing Director of GeekWork, the recruitment business unit of GeekWire.

Greer spoke regularly with GeekWire readers who lost their tech jobs. He describes the feeling as “somewhere between uncertain and hurtful”.

At the same time, he says, there is also “a thread of hope, if not optimism.”

“The readers I talk to believe we’re going to bounce back, and I don’t remember a single one looking to leave the Greater Seattle area,” he said.

Job seekers adapt their expectations, timelines and long-term plans. Carroll, 35, spent nearly eight years at Tableau Software, thanks to the Seattle-based data visualization company’s acquisition by Salesforce, before working for a year as director of field and digital marketing for Heap Analytics startup.

As he prepared for his sabbatical earlier this year, Carroll considered making a “hard pivot” in his career. He explored the idea of ​​getting the training and certification needed to become a cybersecurity analyst, which is one of his long-time interests. He’s since decided he’s not ready to make the move.

A complicating factor: his partner works at Amazon, and while she was unaffected by the layoffs announced last week, the situation has created an additional degree of uncertainty in their household.

Carroll is now in her fourth week of actively searching for her next job in marketing, reaching out to her network, getting advice from mentors, exploring openings at companies that are still hiring, and exploring roles that may arise. open after New Years.

After years in which engineers and other experienced technicians could count on repeated requests from companies seeking to persuade them to change jobs, the sudden silence of recruiters was disconcerting.

He keeps an optimistic attitude through it all.

“I’m not super pessimistic, which is good,” he said, “but I think I’m a lot more realistic now that it’s not going to be as easy to find a job as I thought it was a while ago. two or three months.”

How have you been impacted by the evolution of the tech job market? Tell us your story at tips@geekwire.com.

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