Where I am, 2008 wasn’t too bad in tech, but the aftermath of the dotcom bust was like the end of Infinity War, just there one day and then gone.
No-one expects their career to end at the gilded hand of a giant purple alien.
The problem is that most of the people I've talked to were employed at huge, profitable companies that made actual products. So it was just a blip for them.
I was working on web development after school and got laid off, but all that meant was I had to eat the food my parents made for me instead of eating at fast food places with my friends..
Understanding and adapting to those changes are key. Next up -> IOT - computers in everything - applying AI - Biotech - ? Generally something expensive has to become cheap for the masses. Hayes modems took $1200 - $2000 devices down to <$300. Ethernet made LANs cheap. Twitter made stupidity availability massively scalable for zero dollars:)
Those jobs never really came back as websites became more "Dynamic" and CMSes began to proliferate: So rather than hiring 20 web developers converting copy and design to websites you could hire a 1-3 engineer(s) to customize and run your CMS and non-technical people can provide the content.
In addition to the dotcom boom there was a ton of "Y2K bug" hiring in late 1990s. Many people who never did any programming went to a 4 week course on COBOL and were hired as programmers to fix the Y2K bug. There were, indeed, real job losses at the end of the dotcom boom, but many people who left for other fields would not, in normal circumstances, have been in the software at all. My 2c.
But no small number of people, including many who had worked at large firms, basically left tech.
A good reminder that economic downturns can be actually healthy for people, families, and the environment. With less money, people will drive less, travel less, drink less, eat less meat, spend more time with loved ones, etc etc
It really hit hard about 2 years later in 2003, when all non-web contract work dried up and clients started having trouble paying for work you’d already done. That was really brutal for me, personally. I was also selling some software in addition to doing the contracting. I got really lucky and someone saw my products and wanted to license them for their particular niche. I was just barely able to hang on until a year later when things mostly returned to normal.
If it hadn’t worked out, I probably could have taken a job doing some development work I hated if I really had to. There were still openings, but they were at places like Accenture, or whatever a small-time version of them would be.
At the same time, the web had only proven that regular people were willing to try it, but there was no meaningful consumer or advertiser money flowing through it for another ten years. So basically you had a perfect storm of a bunch of people trying to figure out something from scratch and massive over investment from VCs. When the music stopped it was a bloodbath because there was so little actual revenue.
I don't see the same thing happening now because the web is firmly embedded in our lives and someone needs to maintain all this code. I'm honestly more worried about environmental threats and the sustainability of our way of life than the economy per se.
This could describe today, with crypto (tech still looking for solutions to problems that aren't scams), AI (great potential but mostly in a gimmick phase right now), and VCs coming from a decade of record-low rates causing extreme valuations across the board ($5M seed rounds, etc).
If you exclude Big Tech (which also took a beating but is managing), the smaller tech scene is ripe for a disruption of a very uncomfortable kind.
I’m pretty happy for all those sectors to tank, they don’t produce value that people would pay for, while we struggle finding competent people for product startups generating 500k per employee.
Do the hard tasks and I pay you exactly this amount. People are, really, so lazy. Yes there is some jQuery in the app, well it’s not the bane of the world, and yes we gotta interact with customers, horror, well deal with it and I pay you exactly the revenue it generates.
But of course everyone wants to have K8s and microservices on their resume, rather than building something people want.
I’ve said almost that to my senior, but he keeps hating the jQuery app. It’s fine with me, but don’t complain.
Meta, Amazon, Stripe, Twilio, Salesforce etc are all profitable companies. That’s where the majority of non crypto layoffs came from.
$1.1 billion operating loss the past four quarters on a mere $3.6b in sales. $915m operating loss fiscal 2021, $492m operating loss 2020, $369m operating loss 2019, $108m operating loss (on $650m in sales) for 2018, and so on. They have always lost money and are currently gushing red ink.
It's definitely part of the reason their stock has collapsed in such a dramatic way (a particularly unsupported valuation previously). While even most highly profitable tech stocks have dropped by a lot, Twilio's drop of ~89% is largely reserved for the group of very unprofitable extreme valuation tech stocks.
I was talking about smaller, unprofitable, non-market dominating firms. If they are not profitable they will have to raise or die. And raising in the environment of 5+% rates and poor overall tech stock performance may get brutal. Currently, many of those companies still have significant runways (because they were able to raise a lot earlier), but this will start running out in the next several months. This may already be starting: two of my friends who work in such small companies (robotics and lasers) are sensing job uncertainty ahead. My 2c.
They are saying that many unprofitable companies haven't done their layoffs yet, because they're still coasting on huge funding rounds from 2021. Thus, there are more axes yet to fall.
Not sure how much stock I actually put in that argument -- lots of VC-funded companies are already doing layoffs, too -- but I think you're sort of agreeing with them.
November appears to be the exception where those profitable big company layoffs dominate but it's still not by much.
The long tail is the king, as always.
Their stocks are either in or dangerously close to penny stock category.
I won't believe this is near over until I see worldviews fundamentally change.
Unlike the crash in '08 and '01, the economy now has a hard dependency on tech. There is no "going back" to the world of the past. Smartphones aren't going to be "un-invented". People aren't going to give up online shopping. Businesses aren't going to give up targeted advertising and start buying ads on AM Radio or something. If you look at the big picture, and barring any wild developments like general intelligence AI, the demand for skilled tech workers is only going to increase.
I don't think tech workers are invincible but I think tech is now a requirement for economic growth, which poses a problem: Business leaders and investors have been really ticked off by the tech labor shortage. They tried to fix it with H1B, they tried with all these "learn to code" programs. They tried boot camps. They keep trying, and failing, because being a software engineer requires a degree of intelligence and critical thinking and there will always be a limited supply of that kind of labor.
My pet theory is that some portion of the layoffs are being engineered to undermine the remote work revolution, scare people into accepting lower wages, and get back to "how things were". But the economic need for tech is so large and the supply of labor is so limited I don't see much changing.
During rich years plenty of people came to the industry. Plenty of them are smart and capable, so competition will lower salaries and push some people from their levels.
And god save us if this AI thing will actually take off. It's dumb but it's progressing.
I don't see how it does anything but progress. I obviously have no idea how long it will take before it can replace a software engineer but after playing around with ChatGPT and seeing the code it can create, it's definitely progressing faster than I thought it would.
For example, when things start recovering, I'm curious how quickly companies will rush to increase comp back to recent levels, bring back cut benefits (or reduce their costs that have increasingly been passed on to the employee), change WFH policies, etc.
My gut says they will only do it when labor has leverage again, which means these companies will try to put their thumb on the scale as hard as they can to make up lost ground and then some.
https://www.washingtonpost.com/news/the-switch/wp/2014/04/23...
Clean books, squeezed operations, cash reserves, and providing critical internet infrastructure you’re likely & able to discount at scale right now as well as foreseeable future.
Most non-tech businesses get by with, and prefer, the platform world that spoon feeds them.
It’s either a good time to be Google, or a self-funded startup. Not much in between.
Not claiming that this will happen, but many economists agree that it is fairly likely. So even if you are in a very enviable position in a skilled tech role and are inundated with recruiter calls I would prep: take stock of your finances, determine your personal runway (how long can you maintain current quality of life should your paychecks stop tomorrow) and plan accordingly. My 2c.