Layoffs in the tech industry has been a big story across the country.
Employers who expanded big in recent years have been fast battening down the hatches, hoping to weather an economic downturn fueled by the end of cheap money and record-setting inflation, the likes of which we haven’t seen in decades.
Tripp Mickle, tech reporter for The New York Times, writes this has been a big moment of awakening for a generation of workers who’ve never experienced a cyclical economic crash. For older people, not so much. Listen to the story above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: Layoffs.fyi was reporting nearly 200,000 tech employees have been laid off since the start of 2022 – 50,000 of those cuts in recent months. But not everyone, as you note, is living through this nightmare in the same way. Could you tell us a little bit more about the generational divide here?
Tripp Mickle: Yeah, it’s fascinating. If you pick up the phone, as I did, and reach out to people from, say, Gen-X who were early in the workforce in the late 90s/early 2000s, they came into the tech sector when it was super hot – the place to be – and then got swept up in the dot-com bust. Many of them were laid off 1 to 3 times in a span of a couple of years. And their view of work and their career was really shaped by that experience – so much so that I talked to this one guy, Brian Pulliam, who every year does a gut check and says, “if I’m laid off this year, what am I going to do?”
And that was really informed by that experience years ago, whereas many millennials and many people in Gen Z came into the tech industry during this decade boom that started circa 2010, as companies like Apple and Microsoft and Google moved to the forefront of the global economy. And they viewed tech as like an industry that was impervious to a pullback. They’ve found otherwise. It’s just that they found out later in their career than those on the Gen-X side.
What does this mean as a practical matter? If you weren’t expecting layoffs, you’re less likely to have a safety net or at least not to have given a whole lot of thought to “what if I were laid off within the next year,” as you were saying that older worker was thinking?
Right. I mean, I think it’s just causing them to reconsider their assumptions about the tech industry. You know, a lot of these companies sold a lifestyle, not just a career. These were workplaces where you could get your laundry done. You could get free coffee from a really high-end pour-over coffee place. And many of these companies still have tons of cash. So when they make these cuts, it’s forcing people to recognize that maybe the place that I work isn’t going to be a caretaker quite the way that I assumed on the way in the door.
You know, you think about some of these companies, though – Google, Meta, Amazon, Apple – which has, for its part, huge cash reserves. What about the expectation younger workers have versus older workers when it comes to how those reserves are spent?
Yeah, I mean the cash reserves are really something that investors are viewing as something they’re entitled to. I mean, they’re the stakeholders in the company. They’re the ones who believe that that cash should come back to them, whether that’s through buybacks or dividends. And so that’s what can create a disconnect between what the workers are saying and what shareholders assume and what is, in fact, kind of the reality of the situation. And I think that’s what has led some workers to look at the cash and say, “wait, why are we cutting staff? We have plenty of money in the bank.” But that’s just not the way companies typically function.
One could say that, well, younger workers are more adaptable. I mean, they know more about the gig economy, ways to make ends meet, have – at least traditionally speaking – fewer commitments than older workers who are more likely to have a home that they’re making payments on and, of course, family obligations and that kind of thing. How is this being felt across the generations?
Well, that’s fascinating. You’re right. They are more adaptable, but they’re in a very adaptable economy, too, because if you peel back the numbers and get beyond the headlines and the noise about layoffs, there’s actually still a lot of hiring on aggregate in tech. And so the average worker is finding a new job, something on the order of within three months of being laid off – many of them still in the tech sector.
There are also a ton of opportunities inside more traditional industries – whether that’s finance, health care or even the government. They all need tech workers, and they haven’t always been able to recruit those people because of how much tech companies pay. It’s tough to be competitive, and they’re now finding an opportunity to entice some of these tech workers into their industry to help their businesses, as well.