Upsidedownsizing: Turmoil in Tech (Part Two)
Tech stocks had a rough year in 2022: the tech-heavy NASDAQ index was down 33% (versus the overall S&P 500’s decline of “just” 20%). Consumer confidence fell in the first half and negatively impacted tech revenues before recovering. Meta made some mistakes. Interest rates rose, further dampening the party. Investors decided that other stocks represented better inflation hedges. (See Source.) All in all, it wasn’t pretty.
And the tech companies responded in late 2022 and early 2023 in a litany of bad news for tech employees:
- Company: Layoffs Share of Employed (See Source.)
- Amazon: 18,000 (1.2%)
- Alphabet: 12,000 (6.4%)
- Meta: 11,000 (12.6%)
- Microsoft: 10,000 (4.5%)
The same source goes on to quote the respective CEOs generally along the lines, “We hired too many as the pandemic subsided and now, we have to right size the company for the business we expect.”
This is undoubtedly traumatic for the affected parties. However, the Economist at least sees tremendous pent-up demand for these tech skills in other industries who have not been able to hire adequately in the current very tight labor market.
Here are a few selected facts from this source:
- “The tech industry employs 10% more staff today than in January 2020, according to the Computing Technology Industry Association (Comptia).”
- “Even after Meta, a social-media giant, loses the 11,000 workers it laid off last month, it will still employ nearly 70% more than it did before the pandemic.”
- “Sacked techies should not struggle to get work. Lots of old-economy firms need their skills. Walmart, despite its lay offs, keeps snatching up data scientists and other hyper-numerate types. Already 59% of tech professionals work outside the tech sector, reckons Comptia. On the whole, demand for highly paid white-collar personnel is as hot as ever. Unemployment rates for financiers, technologists and managers are even lower than America’s overall rate of 3.7%, and have fallen further over the past 12 months.” (Economist: December 4, 2022, Is a white-collar recession looming?)
The New York Times also notes that Amazon, too, has apparently hired 728,000 employees since 2020, a net gain after the recent layoffs of more than 700,000! (See Source.)
The Barrett Group spoke with one of the laid off senior managers from Google (Alphabet) last week.
He shared that he had received a reasonable severance package. And that only about 1,700 of the reported 12,000 layoffs were in the San Francisco Bay Area. He also confirmed that the cuts were at all levels. His one complaint was the impersonal nature of the message: he was cut off from his company account in the middle of the night and informed of his firing by email.
But he also agreed that there is plenty of demand for the tech skills that are being liberated at the moment, and “having Google on your resume is not the worst thing in the world.”
Over the last three decades the Barrett Group has seen plenty of business cycles. Inevitably, a large share of executives ultimately comes to the conclusion (sometimes because of force majeure) that they are in the wrong job. With the wrong company, the wrong industry, and then they face a significant obstacle in “recharting,” their professional careers, especially if all they know about is executive recruiters. That is because, in general, recruiters have been hired to fill a role with someone who exactly fits the job requirements. An executive who wants to change industries or roles will rarely fit such rigid requirements… which is where the Barrett Group comes in.
Working with the Barrett Group you are at least seven times more likely to land the job of your choice than when you work only with recruiters because we serve a vastly larger market: 75% of our clients land via the so-called “unpublished market.” [Read More.]
Of course, we can help a client simply move from one company to a competitor in the same industry (and significantly increase total compensation along the way) but where we really shine is for the many executives who want to make a major change… whether because they are bored, feel there is no longer a good fit, or perhaps they have been glass ceilinged… those executives who want to transfer to a new playing field.
We actually track transferable skills and are adept at helping executives recognize and explain the transferability of their skills and experience to new employers. [Read Do you have tremendous transferability? for more information.] Here is how one recent client, Ned, described his Barrett Group experience through which he accepted an offer as VP of Business Development:
“I don’t have experience in this field but, thanks to the skills I worked on with George [his Barrett Group career consultant], I felt confident and was able to portray myself in the best possible light.”
Ned was thrilled to have landed an exciting job at the right level, with great compensation and potential.
“There were times where I felt in a rut during my job search, but regular engagement with George kept me energized and on path. That was the most helpful aspect of my job search experience.” [Read More.]
And by the way, being downsized does not mean you have to be down in the mouth. Consider the Upside of Downsizing… After the emotional shock and assuming you have at least a small financial buffer you are free to investigate. To all of those other professional avenues you have never been able to look into before. Especially, if you have a tried and true Barrett Group team backing you up to facilitate your rapid recovery.
That is why we call the current phase “upsidedownsizing.” First, the drastic headlines scare executives unnecessarily because the market for executives is very vibrant. Second, even if you are downsized, this is most likely your chance to discover new opportunities.
Naturally, we suggest you improve your odds by hiring the Barrett Group. We make it our job to help you find yours.
Peter Irish, CEO
The Barrett Group