Being let go is hard, especially with the cost of living on the rise, and talk of a recession looming.
Earlier this month, Tesla founder TSLA, +1.22% Elon Musk fired 7,500 Twitter staff, representing nearly 50% of its global workforce, just days after he took over the social-media company in a $44 billion deal.
Facebook’s parent Meta META, +1.44% also announced it would lay off 11,000 employees, equivalent to 13% of the social-media company’s employee base. And this week, Amazon AMZN, +0.80% said it plans to let go 10,000 workers, about 3% of its white-collar employees, and signaled that there may be more cuts next year.
Tech companies are facing strong headwinds. More than 59,000 people were laid off in the tech industry so far this year, according to compiled data by Challenger, Gray & Christmas for MarketWatch earlier this month.
“Tech companies are feeling strong headwinds. More than 59,000 people were laid off in the tech industry so far this year.”
It’s increasingly hard for laid-off employees to make ends meet. Inflation stood at 7.7% in October compared to a year ago, slightly lower than the 40-year-high of 8.2% recorded in September.
The Federal Reserve has raised rates six times so far this year to combat the rise in the cost of living. Interest-rate hikes make it more difficult for high-growth tech companies to deliver growth at the same momentum as previous years.
The high interest-rate environment has made borrowing more expensive, and a strong dollar reduces the value of revenue from foreign markets. Those Fed rate hikes have also pushed the short-term borrowing rate to a target range of 3.75% to 4%, making everything from car loans to credit-card debt more expensive.
In fact, the decline in tech hiring began around June — at the same time the Fed started raising interest rates, according to ZipRecruiter.com, a jobs search engine.
But there is good news: The overall job market is still strong and, in some sectors, labor shortages still persist.
Time for a reset
Those who lost their jobs in recent months will have to face a hard reality: It might be hard to get a job that’s equivalent in seniority and compensation to the one you just left, said Renata Dionello, chief people officer of ZipRecruiter.
As difficult as it might be at first, Dionello suggests telling yourself, “I’m going to see this as an opportunity.”
“Remember this period as a period of reinvention, a period of discovery and a period of reconnecting with a bunch of people,” Dionello told MarketWatch.
Those fortunate enough to have healthy severance package will likely have more time to pause and think about their long-term career goals, she said.
Consider alternative sectors
The U.S. economy gained a surprisingly strong 261,000 new jobs in October, underscoring the persistent strength of a labor market. There are jobs out there, so keep your skills fresh and think about developing new ones, Dionello said.
Scoring a similar job in tech at the moment could take longer and you will likely face strict competition, said Glassdoor chief economist Aaron Terrazas. The recent layoffs released a lot of talented individuals into the job pool at the same time.
A few other sectors that require people proficient in software and other technology skills include healthcare, government departments and education, said Julia Pollak, chief economist from ZipRecruiter.
Healthcare has a huge need for people who can develop apps and implement telehealth services, she said. Governments are always hungry for techies, but traditionally had difficulty competing with the private sector. School districts too need to improve digital resources for students, Pollak said.
Salary is not everything
It’s not always about salary, especially during such an uncertain time. Health insurance, paid time off, 401(k) plans and other work-life balance issues like remote and/or hybrid work may also play a role in your decision making.
Some 37% of job seekers in October said job security was one of the most important things they are looking for in their next job, up from 31% a month earlier, according to ZipRecruiter’s Job Confidence Index.
If you are starting out in your career, it’s always worthwhile focusing on long-term growth, Terrazas said. If your next job is at a smaller company, Pollak said, “You can often perform a wider range of tasks, and get a broader experience.”
“Finding a job is becoming a more urgent priority for many job seekers, as inflation whittles away their savings and the risk of a possible downturn appears to grow,” Pollak added. So look at the entire package when assessing the value of a job.
Start your own side business
Remote working makes starting a business a lot cheaper than before the coronavirus pandemic, said Pollak. Founders do not always need to rent offices, and it’s easier to find remote workers and affordable online services.
“You don’t need a flashy office. You don’t need all this stuff anymore. You can hire someone to make your website,” she added. Setting up an online store, for example, can be done with a simple computer program rather than a raft of technicians.
Some VCs recently told MarketWatch that they expect the economic downturn to last for the next year or so as the tech industry goes through a period of readjustment. They will be watching for smart startups to emerge.
“Often in tech recessions, we see the hardiest, most innovative, sound tech companies arise,” Pollak said. That’s because in this kind of environment, it’s very difficult to get funding for any old startup idea, so you need to bootstrap the company and keep it profitable from day one, she added.
But you don’t need to do it for big life-changing ideas, you can also do it for survival, said Glassdoor’s Terrazas. Even moonlighting as a career coach or personal fitness trainer can help when you’re between engagements, he said.
“That’s not necessarily a business that becomes a global giant, that’s more of a way for people to make ends meet while thinking, ‘What’s next?’” Terrazas added.
Foreign workers should move fast
If you are working in the U.S. on a visa, timing is everything. For example, U.S. immigration law gives people on H1B visas a 60-day grace period to stay in the U.S. if they are let go.
Apply for as many roles as possible, lean into your network, and start interviewing now, Sophie Alcorn, founder of Alcorn Immigration Law, which has offices in Mountain View, Calif. and New York, wrote in a a recent column for TechCrunch.
Ask the visa-support question early in the interview process, Alcorn wrote. Don’t waste precious days or weeks only to find out that the prospective employer is not in a position to provide visa support.
And if you want to pursue your own company? Do it now, and consult an immigration attorney to explore your options.
And, finally: Never take a layoff or setbacks in job searching personally. The road ahead will be stressful enough without carrying around resentment or insecurity.
Contrary to the common assumption that companies often lay off workers who do not perform well, experts told MarketWatch that a lot of recent layoffs among tech companies were actually more team- and product-based.
“It’s not a reflection on your skillset, your desirability as an employee, or your prospects in the future,” Alcorn said.