I was working as a programmer during both the dotcom crash and the 2007-2008 real estate crash. I would describe these downturns as "bumpy".
But neither was catastrophic for most of the programmers I knew. Some of us moved, others found new jobs. Some of the least-skilled, including the "webmasters" who didn't know JavaScript or CSS, did wind up leaving the industry in 2001.
If you had a 1-year emergency fund, you would probably have been fine in either crash. The people who were the hardest hit were actually the people living in major tech cities, because they had the biggest concentrations of layoffs. The longest I was on the job market was about 3 months in fall 2001, but I had to move out of Boston. I got a slightly underpaid but really awesome job.
Right now, there are tens of thousands of organizations that would be revolutionized by some simple custom software. These organizations can't compete with FAANG salaries. But they'll be happy to absorb quite a few programmers. Some of the jobs will be valuable and interesting work.
So like I said, a hard crash can be bumpy. But for most professional programmers, it probably won't be catastrophic.
Oh, during the dotcom crash, Internet companies failed by the thousands in the US. But many of them were absolute garbage companies, far worse than the average modern startup. Frankly, scam companies were coming out of the woodwork. It was even worse than the later mobile/social/local/GroupOn era.
But just because many companies folded, it didn't necessarily mean that competent programmers were out of work indefinitely. There was a period of about 6 months when getting hired was nearly impossible, but after that, things started to turn slowly upward.
Honestly, if you're a programmer, I really recommend an emergency fund. Especially if you're being paid ridiculously well, keep your living expenses lower, and put some money aside.
I don't agree with this analysis. I'd be shocked if Google did any layoffs (though it's always possible) instead of just freezing hiring and letting natural attrition happen for a while. As for the signal to employees, there are so many employees already that I imagine many would be agree that the company is too big. It doesn't mean that the ship is sinking, just that they don't need an infinite number of employees. And Google's products are so dominant that you can't really believe the business is failing.
Now, FB on the other hand... I'd feel a lot more antsy, yeah. Their business doesn't feel nearly so stable.
In WWII, some companies who were turned to serving the war machine continued to advertise the things they couldn't make or sell, anyway. When things came back those folks were on top of the world. If the big FAANG companies can ride out business cycles without acting like they've become vulnerable, they're likely to further cement their positions.
While it’s possibly true in this case, that’s definitely not always true. I’ve been in two companies that had to implement a hiring freeze because growth was too fast. Everyone understood, because nobody new each other, because half the company was just hired.
1. "We're in a bubble!, it's only a matter of time before it all comes down" 2. "The market is hot for developers right now!"
I've been through hiring sprees and layoffs, I've had startups succeed and fail, and I don't think my experiences are exceptional in any way. Things wax and wane, trends come and go. Keep a bit of savings, live within your means, and do good work and things will most likely work out well for you in the long run.
Just an aside, that this rebranding of Marx's theory of crisis never fails to get a chuckle out of me.
In mainstream economics is presented as some magical property of the way economies work, where Marx specifically predicts cyclically economic crisis created by contradictions inherent in the structure of capitalism, the periodically build to a tipping point leading to crisis and ultimately the resolution of these contradictions.
For Marx, these crises ultimately culminate in the unavoidable collapse of capitalism. Which is where the fundamental drive to find alternatives to capitalism comes from for Marx, not because it is an ethically questionable system, but because it is one fundamentally headed towards its own destruction.
But "business cycle" sounds much better, and leaves off all that spooky "systemic problem" stuff.
But I mean that's exactly the whole difference, right? Both Marx and others identified this pattern, Marx believes this ultimately will explode, others don't, so it makes sense that others would want to label it in a way that indicates their view that the pattern is "normal" and sustainable.
I'm not even saying Marx is wrong, but just because Marx thought something about something he noticed doesn't mean he's right. Others that came after him are allowed to come to different conclusions about the things he noticed.
The first half of the first chapter of the Communist Manifesto is Marx being a total fanboy for capitalism and it's capacity for transforming the world.
Marx predicted that capitalist competition, which he expressed admiration for, would be too successful, and that people would just fail to reign it in and deal with the result.
There's a conceptually very simple fix to the crises Marx predicted if he's otherwise right:
Share more of the value, and spread labour around if automation comes to reduce the need for labour to the extent he predicted, where, to paraphrase, both overproduction and lack of work becomes common.
It doesn't take equality to prevent it, just enough adjustment to smooth out the crises enough to prevent escalation.
Marx took capitalists own predictions about the efficiency of capitalist competition at face value, and simply asked what will happen if capitalism eventually runs out of new markets to expand into (temporarily or permanently) and responds by driving down margins, and his prediction of eventual revolution is predicated on the assumption that society will fail to apply those very simple fixes.
Ironically, then, if capitalism survives, it might be because the competitive pressures are not as strong as Marx believed.
It all sounds better than his "mass murder/starvation death" systemic problems.
An actual hiring freeze sends a very strong negative signal to employees and investors. To employees it says "the ship is sinking." Layoffs are right around the corner and that is absolute poison to morale. To investors it says "technical or not, we've hit a recession." Brace yourselves for impact. Google and Facebook are both advertising companies, so they are tightly coupled to the business cycle. When business spending starts to falter, they'll feel it first. And they have.
So it's not surprising that the companies themselves are far from clear about this, sending mixed messages. I expect them to continue to do so for as long as they possibly can.
The bubble has inflated so far for so long, I get the sense that even among cynical young employees and "investors" there's a sense of permanence in the positions of both companies. The thing is, those with fewer than 10 years experience have never seen the ferocity of the other side of the business cycle. When it turns, that mofo turns. Those in top management positions have seen it, and they're going to do everything in their ability to deny and evade it.