When Lyft laid off 13% of its employees in November, Kelly Chang was shocked to find herself among the 700 people who lost their jobs at the San Francisco company.
“It seemed like tech companies had so many opportunities,” Chang, 26, said. “If you got a job, you did it. It was a sustainable path.
Brian Pulliam, on the other hand, brushed off the news that crypto exchange Coinbase was taking down his job. Since the 48-year-old engineer was laid off from his first job at video game company Atari in 2003, he said he has asked himself once a year, “If I was laid off, what would I do? “
Kelly Chang in San Diego, Calif., on Jan. 19, 2023. Chang was among 700 people who lost their jobs in recent layoffs from transportation company Lyft. (Ariana Drehsler/The New York Times)
The contrast between Chang’s and Pulliam’s reactions to their career disappointments speaks to a generational divide that is becoming clearer as the tech industry, which has grown rapidly during the pandemic, turns to mass layoffs.
Microsoft said this week that it plans to cut 10,000 jobs, or about 5% of its workforce. And Friday morning GoogleAlphabet, Alphabet’s parent company, said it plans to cut 12,000 jobs, or about 6% of its total. Their cuts followed big layoffs at other tech companies such as Meta, Amazon and Salesforce.
Millennials and Generation Z, born between 1981 and 2012, began their careers in tech during a decade of expansion when jobs multiplied as fast as iPhone sales. The companies they joined conquered the world and challenged economic rules. And when they went to work at companies that offered bus rides to the office and amenities like free food and laundry, they weren’t just accepting new work; they adopted a lifestyle.
Brian Pulliam at his home in Issaquah, Washington on January 19, 2023. When Pulliam lost his job at Coinbase, he saw an opportunity to start his own business. (Meron Tekie Menghistab/The New York Times)
Few of them had experienced mass layoffs.
Baby boomers and Gen Xers, born between 1946 and 1980, meanwhile experienced the biggest contraction the industry has ever seen. The dot-com crash of the early 2000s eliminated more than a million jobs, emptying Silicon Valley’s 101 freeway of commuters as many businesses closed overnight.
“It was a bloodbath, and it went on for years,” said Jason DeMorrow, a software engineer who was laid off twice in 18 months and out of a job for more than six months. “As concerning as the current downturn is, and as much as I sympathize with those affected, there is no comparison.”
The generational divide in technology is representative of a larger phenomenon. A person’s year of birth has a big influence on opinions about work and money. According to a 2011 study by economists Ulrike Malmendier of the University of California, Berkeley and Stefan Nagel of the University of Chicago, early personal experiences strongly determine a person’s appetite for financial risk.
Haley Persichitte, 24, who works as a house manager for a neighboring family, at her home in Denver on Jan. 12, 2023. She saves about $600 a month, mostly for emergencies, and has saved about $15,000. (Rachel Woolf/The New York Times)
The study, which analyzed the Federal ReserveThe Survey of Consumer Finances from 1960 to 2007 found that people who reached adulthood in the 1970s, when the stock market stagnated, were reluctant to invest in the early 1980s, when it roared. This trend reversed in the 1990s.
“Once you have your first crash, things change,” Nagel said. “You realize bad things are happening and maybe you should be a little more careful.”
For Gen Xers, the dot-com meltdown hit early in their careers. From 2001 to 2005, the technology sector lost a quarter of its workers, according to an analysis of Bureau of Labor Statistics data by CompTIA, a technology education and research organization.
The layoffs that swept the industry were worse than the recession the early 1990s, when total tech jobs fell by 5%, and the global financial crisis of 2008, when the workforce shrank by 6%.
Shea German-Tanner, 22, a social worker, near her home in Fort Wayne, Indiana, Jan. 12, 2023. German-Tanner says she feels like she can’t save money because she always lives from one salary to another. (Maddie McGarvey/The New York Times)
In 2011, the tech industry began a hiring boom that would last for a decade. It has created an average of more than 100,000 jobs per year, and by 2021 it had recovered all the jobs lost during the bursting of the dot-com bubble.
The employment figures take into account software, hardware, technology services and telecommunications companies, including Apple, Meta, Nvidia and Salesforce. But they may exclude some tech-related companies such as Airbnb, Lyft and Uber due to ambiguity in government labor market reports that categorize some companies as consumer services, said Tim Herbert, director of the research at CompTIA.
The biggest increases in tech jobs came after the pandemic began, as companies rushed to meet growing demand. In 2022, the sector created nearly 260,000 jobs, according to CompTIA, the most it has created in a single year since 2000.
Shea German-Tanner, 22, a social worker, near her home in Fort Wayne, Indiana, Jan. 12, 2023. German-Tanner says she has about $600 in her savings account and has no not started saving for retirement. (Maddie McGarvey/The New York Times)
Tech job increases continued last year even as big layoffs began, though it’s unclear whether that trend has continued this year. New job opportunities were a factor, as nearly 80% of laid-off tech workers said they found a new job within three months, according to a ZipRecruiter survey.
“We’re seeing the pandemic hiring mania being fixed — not the bursting of a bubble,” said Andy Challenger, senior vice president of career transition firm Challenger, Gray & Christmas.
Last fall, David Hayden, a program manager with a doctorate in physics, learned from his manager that he would be laid off from nLight, a semiconductor company. Worried about how he would pay for his eldest daughter’s tuition, he immediately contacted recruiters to arrange interviews. In December, a month after being laid off, he started a role at Lattice Semiconductor.
In each interview, Hayden, 56, said he was fired, he said. His experience during the dot-com crash, when he avoided layoffs even as talented colleagues were laid off, taught him that cuts aren’t always rational.
“The shame of being fired is gone,” Hayden said. “Companies know a lot of good people are being laid off right now.”
For Pulliam, losing his job at Coinbase was an opportunity. He funneled his severance pay into his own company, Refactor Coaching, a career coaching service for software engineers.
“It’s a gift,” Pulliam said. “I don’t think that story is being told. It’s always dark and gloomy.
But for tech workers experiencing their first economic downturn, the cuts have been eye-opening. Chang studied product design in college with the goal of joining a tech industry that seemed recession-proof. Getting fired from Lyft shook that faith.
Erin Sumner, Software Recruiter at FacebookMeta, the parent company of , used to brag to potential hires that the company was the fastest ever valued at $1 trillion. She said she would promote the company’s strengths even last year when its share price fell and its core business, digital advertising, struggled.
When rumors of layoffs began circulating last year, she assured her colleagues that their jobs were secure, pointing to the more than $40 billion in cash the company had in the bank. But in November, she was among 11,000 laid off workers.
“It was heartbreaking,” said Sumner, 32. She found a new job as the head recruiter for DeleteMe, a startup that aims to remove a customer’s information from search results. But she said she cringes every time she reads about other tech layoffs.
“I fear it will get worse before it gets better,” Sumner said. “There are no guarantees. I was fired by the safest company in the world.
A similar reversal of fortune has challenged companies selling software services. Shares of Salesforce, an industry leader, fell nearly 50% last year as its sales growth slowed. The company had splurged during the pandemic, spending $28 billion to buy Slack Technologies. It went from 49,000 to 80,000 employees in two years.
At a town hall meeting last week to discuss the company’s decision to lay off 10% of its workers, Marc Benioff, the company’s CEO, tried to sympathize with his disgruntled staff by putting the cuts in their context.
“I’ve been through a lot of tough times in this business. Every loss awakens another for me,” he said, according to a recording of the call heard by The New York Times. “Obviously we’re talking about a layoff. I think of the employees who have died. I think of the people we lost and never wanted to lose.
When asked what advice he had for employees worried about the state of the company and further layoffs, Benioff suggested “gratitude.”
Austin Bedford learned he was one of about 8,000 people fired from Salesforce when he tried to log into his computer and couldn’t access Slack, the tool he was working on as a conversation designer. Originally from East Palo Alto, California, he studied computer design because he hoped to join one of the profitable businesses in his backyard. The job he landed with the company in 2021 fulfilled a dream. He never imagined he would lose him so soon.
“I was shocked,” Bedford, 41, said.
Although disappointed at being made redundant, he said he tried to view unemployment as a “blessing in disguise” and intended to be selective about his next job.
“There’s something shiny around the corner,” Bedford said. “I just need to have faith.”
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