When the news of sweeping layoffs hitting the tech industry started hitting the headlines, Delivering Happiness Jenn Lim CEO felt like she understand what people were going through. A victim of layoffs during the dot-com bubble burst in the late 1990s to early 2000s, she remembers the depression that hit the Bay Area.
"It's such a drastic change from the high to the low," said Lim, who authored "Beyond Happiness." "I think in some ways, because we've been in a low for a while and we've had already a recession, things have been continuously tenuous."
Within the last month, about 38,000 tech jobs were lost according to Layoffs.fyi, for a total of 129,000 this year. Among them were some of the country's most prominent tech employers: Amazon announced it's shuttering 10,000 jobs and Meta is laying off 11,000 workers. The numbers are only expected to grow, with Roku announcing on Thursdsay it is letting go of 200 people or about 7 percent of its staff.
Though the job cuts are spread throughout the world, it will certainly be felt in California where many of the tech giants call home. For example Meta, which was required to file notices with state governments for mass layoffs, announced it is set to lay off about 2,700 people in its California offices beginning in January 2023. About 2,500 of those jobs in the Bay Area, meaning more than 20 percent of the cuts will be based in the region.
Lim recalled streets emptying out during the dot-com bubble burst, similar to what happened during the pandemic. People began hunkering down and watching their budgets, but with more time on their hands they also began to meet up in bars more, which spurred creativity and collaboration.
"It was a bigger excuse to try to network," she said. "I do think that in some ways that will likely happen again because of the last two and half years of starving for connection and needing something new and more than being in [the] Zoom lens everyday. So there's a chance that this might be, in that sense at least, a blessing in disguise."
Though many of these jobs may be cut in California, the growth of remote work mean many of the affected workers may live elsewhere. Many tech companies allowed workers to do their job from anywhere, and coupled with the expensive cost of living, many employees have relocated to areas where the cost of living is more reasonable. A report from the Federal Reserve Bank of Chicago and United Van Lines found the number of people leaving California already accelerated during the pandemic.
So while this wave of layoffs may not leave the state with extremely high unemployment rates, it could encourage more people to go.
"I think this is only going to accelerate the exodus out of states like California to more work-friendly states and lower tax states, like Texas and Florida," said Harley Lippman, CEO of the employment agency Genesis10, which does staffing across the U.S., including in California. "So I think it doesn't bode well for California with those big layoffs and technology."
This could provide an opportunity for smaller startups to hire employees with more experience. Though Lippman argued the most promising employees usually retain their jobs during layoffs, he pointed out the influx of people looking for jobs could make them consider companies that they might not have in the past. Extended severance packages may make people more amenable to new opportunities in 2023, since they have time to consider options.
"If someone's interviewing for a job and they get an offer today, they're going to be more likely to accept it because they see that there is not so many jobs these days," Lippman said. "In fact, the market may be saturated with IT professionals."
It also may make them open to jobs outside traditional tech, which other industries have been waiting for. Daphne E. Jones, CEO and founder of The Board Curators, sits on the board of Masonite International, which makes and distributes external doors. Companies like her's look for technologic innovation with 3-D printing and digitalization, but top candiates are often snatched away by tech giants who can offer more pay and perks.
"If you have a person that has been laid off, there are companies all over — maybe California though not as much, but they're still there," noted Jones, who authored Win When They Say You Won't. "There are other companies that don't do tech, that are not technical natives. If somebody wants job security, they can go work for any of these companies, because they will be then a big fish in a small pond."
The important part is to keep your head up. Though the tech industry may be going through a rough patch, it's not going away. Those with experience are valuable in many areas.
"For me was the biggest lesson of like, 'Wow, I worked my a– off and still got fired by someone that really doesn't care,'" said Lim of Delivering Happiness.
It also helped her prioritize what was important.
"It became like this forcing function to make me really value life," she said.