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Where have all the laid-off tech workers gone?

Tonlearn The tone has shifted in Silicon Valley in recent months, just look at Mark Zuckerberg’s announcement in February that 2023 would be “the year of efficiency.” It’s hardly the kind of language that gets your heart pumping — unless you’re an employee who takes it. On March 14, the tech giant Meta, run by Mr Zuckerberg, announced it would cut 10,000 jobs, adding to the 11,000 it cut in November last year.

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Yuan is not alone. On March 20, another technology giant, Amazon, said it would lay off a further 9,000 corporate employees, having previously laid off 18,000 white-collar workers. So far this year, U.S. technology companies have announced 118,000 layoffs, compared with 140,000 last year, according to data provider Crunchbase.

Investors cheered tech companies’ newfound cost awareness.High technical content Nasdaq The index is up 17% from its recent low in late December. These companies are hearing the market’s message loud and clear. On March 24, the chief operating officer of business software company Salesforce hinted that the company would soon add to the 8,000 layoffs announced in January.

They still have a ways to go: Only 6% of the U.S. tech workforce has been laid off since the start of 2022. As tech companies continue to hire throughout 2022, layoffs are only beginning to reduce total industry employment (see Figure 1). In contrast, the overall technology workforce in the US fell by 23%, or 685,000 jobs, from the peak of the Internet boom in the early 2000s to its nadir in late 2003.

Still, the scope and depth of recent layoffs has been enough to raise two questions. First, who gets the stamp? Second, where did the laid-off workers go?

Technologists themselves have largely been spared so far, observes Tim Herbert of the Computing Technology Industry Association, a trade body. Instead, the layoffs are mainly targeting business functions such as sales and recruiting. These have grown steadily as a share of technology industry employment in recent years, a clear sign of inflation (see Figure 2).

From the height of the pandemic in the spring of 2020 to the employment peak in early 2023, the technology industry added about 1 million new workers. Just bringing in numbers like that requires hiring a lot of recruiters; as a rule of thumb for headhunters, one recruiter can take on 25 new hires per year. Many of these recruiters may be in short supply right now.

But experts are not immune to the efficiency drive. As part of the layoffs, Meta will restructure its technology division in April. Releasing talented tech workers back into the wild could be a boon to other industries struggling with digital transformation. For years, unpopular industries such as industrial goods have struggled to compete with the tech industry for talent. Now they are swooping. US tractor maker John Deere has been snapping up laid-off skilled workers to help it build smarter farm machinery. Last year, the company opened an office in Austin, the thriving tech hub of Texas. Automakers, increasingly focused on software, are also hungry for technologists. So are banks, health insurers, and retailers.

Some laid-off tech workers are helping to fuel a new generation of startups.apply in January yes Combinator, a startup school in Silicon Valley, grew fivefold from the previous year.The excitement is especially strong in the lively Chat fieldcommon technology– Like “generative” artificial intelligence (artificial intelligence), which uses complex algorithms and vast amounts of data to produce everything from papers to artwork — so much so that even big tech companies continue to recruit enthusiastically in the region.

Optimists hope the technology will unleash a new wave of creative destruction like the smartphone before it, because artificial intelligence Entrepreneurs have come up with all sorts of ingenious applications.new artificial intelligenceThis may in time mean less need for human marketers. But they could, like other breakthroughs before them, create entirely new categories of jobs—especially in the tech industry itself.

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