The climate in Silicon Valley is now very different from previous years of the pandemic. In mid-March, Meta announced a new “wave” of massive layoffs that would force 10,000 of its employees to leave. Last November, Mark Zuckerberg’s company fired 11,000 more people.

However, Meta is not the only tech giant to cut jobs en masse: Amazon also announced a second round of layoffs on March 20, laying off about 9,000 employees after another 18,000 layoffs.

U.S. tech companies have laid off 118,000 people this year, according to Crunchbase. There were 140,000 more layoffs last year, “and more likely to follow,” the Economist analysis notes.

Investors welcome the “reversal”. The Nasdaq Tech Index rose 16% from its low in late December.

Who runs away and who gets fired?

Layoffs since the beginning of 2022 account for just 6% of US tech workers. However, recent layoffs have been wide-ranging and deep enough to raise two questions: Who is being laid off? And where do the laid-off employees go?

So far, tech workers have been spared, notes Tim Herbert of Comptia, a nonprofit trade association that issues professional certifications for the tech industry. Against, most of the cuts are in the sales and recruiting departments. These departments have swelled in recent years, and from the onset of the pandemic until the first months of 2023, the tech sector has hired nearly a million employees.

Recruiting this many employees also required hiring in HR departments, and a recruiter was considered successful if they recruited approximately 25 new employees each year. Many of these recruiters are now considered fired.

Where do the laid-off go?

But even experts in this field are not immune. As part of the layoffs, Meta will restructure its technology operations next April. Releasing talented workers back into the labor market could benefit other sectors that are vying for skilled workers..

For years, industries such as manufacturing have competed with the technology industry for “talent”. Now the picture is different. John Deere, an American tractor manufacturer, is hiring fired technicians to help build smart farm equipment. Last year, the company opened an office in Austin, Texas’ technology hub. Automakers, increasingly focused on software, are also in need of talented technicians. So do banks, health insurance companies and retailers..

Some of the fired techies are fueling a new generation of startups. In January, applications to y Combinator, the startup school in Silicon Valley, increased fivefold from the previous year. The hype is also high in the field of artificial intelligence, which uses complex algorithms and massive amounts of data to create everything from essays to artwork. After all, this is where hiring at Big Tech continues.

Optimists hope this technology will spark a new “wave” of creative destruction as entrepreneurs invent new varieties of smart apps, just like they did with smartphones. With new AI systems in the future, fewer employees may be required in areas such as product promotion departments. At the same time, however, entirely new categories of jobs could be created.as happened with other discoveries in the past.

Source: The Economist