Allison Croisant, a data scientist with nearly ten years of experience in the technology sector, found herself unexpectedly laid off by PayPal earlier this year, adding to the growing ranks of unemployed professionals in her field. Croisant succinctly describes the current job search process with one word: “Insane.”
“Everybody else is also getting laid off,” remarked Croisant, who resided in Omaha, Nebraska, and worked remotely for PayPal.
Her sentiment echoes the broader trend. Since the beginning of the year, Layoffs. fyi, a tracking website has reported over 50,000 job cuts across more than 200 tech companies. This continues the trend from 2023, during which over 260,000 individuals from nearly 1,200 tech firms lost their employment.
Major players like Alphabet, Amazon, Meta, and Microsoft have participated in these downsizing efforts this year, alongside other notable names such as eBay, Unity Software, SAP, and Cisco.
The market response has been largely positive, with Wall Street rewarding cost-cutting measures by propelling many tech stocks to record highs. This optimism stems from the belief that disciplined spending, coupled with efficiency gains from artificial intelligence, will drive increased profits.
In January alone, PayPal announced the elimination of 9% of its workforce, amounting to approximately 2,500 jobs.
For those like Croisant facing unemployment, the road to reemployment appears daunting. Challenger, Gray & Christmas, an outplacement firm, reported 2023 as the second-largest year of tech job cuts on record, trailing only the dot-com crash of 2001.
Not since the collapse of Pets.com, eToys, and Webvan have so many tech workers been displaced within such a short timeframe.
The recent surge in job cuts marked the highest February count since 2009, during the financial crisis when companies prioritized cash preservation.
CNBC interviewed a dozen individuals who lost their tech jobs over the past year, revealing the challenges of navigating the labor market. Some requested anonymity, sharing insights into a highly competitive landscape with stringent job requirements and reduced compensation compared to previous positions.
This situation is particularly perplexing for software developers and data scientists, who not long ago possessed some of the most sought-after skills globally. Now, many contemplate leaving the industry to secure employment elsewhere.
“The market isn’t what it once was,” observed Roger Lee, the mind behind Layoffs. fyi. “To secure a new position, many salespeople and recruiters are leaving tech entirely. Even engineers are compromising — accepting roles with less stability, a tougher work environment, or lower pay and benefits.”
Contrary to the notion of AI replacing engineers, tech salaries have “largely stagnated” over the past two years, as noted by Alex Kantrowitz of Big Technology, citing data from Comprehensive.io, a recent compensation tracker.
Croisant’s job search involved applying for roles inundated with hundreds of applicants, as revealed through LinkedIn’s Talent Insights platform. Some positions now require advanced degrees or professional experience in machine learning and artificial intelligence, a new trend in Croisant’s job market experience.
After five weeks of searching, Croisant applied to 48 openings and secured two interviews. Ultimately, she accepted a lower-level data analyst role, facing a roughly $3,000 reduction in base pay for a contract position at a financial technology company starting next month.
“This was an absolutely terrifying experience for me, and I’m not sure if I’ll ever truly feel secure in a job again,” reflected Croisant. “But I’m still one of the lucky ones in the end. I have friends who’ve been looking for months and still haven’t found anything.”
Krysten Powers, who spent two years in marketing at travel tech startup Flyr, found herself laid off in January, experiencing firsthand the challenges of navigating today’s labor market, which she describes as akin to a full-time job, if not more demanding.
“You’re putting out resumes and getting almost immediate rejections,” shared Powers, a seasoned marketing professional of a decade. “It does take a toll on your confidence, and you get this sort of imposter syndrome.”
Residing in Natchez, Mississippi, with her husband and two children, Powers recently purchased a new home, making relocation unfeasible. Consequently, she limits her job search to remote marketing roles, even if it means accepting a pay cut.
“It’s humbling for sure,” she remarked.
These challenges aren’t unique to Powers. Even former Google employees, once synonymous with Silicon Valley’s top talent, face similar struggles.
Christopher Fong, who worked at Google from 2006 to 2015, established Xoogler.co, a community aimed at aiding individuals laid off from the tech giant. With thousands of members, the group offers peer support and numerous events.
In recent times, Google has also seen layoffs, including several hundred positions in hardware, central engineering, and Google Assistant teams in January. The prior year, the company slashed 12,000 jobs, around 6% of its workforce.
For many ex-Googlers, like Michael Kascsak, securing a job with comparable pay proves to be the biggest hurdle. Kascsak, laid off in March of the previous year, transitioned to head talent acquisition at veterinary business CityVet, willing to accept a pay cut after an extensive job hunt.
“I went into this knowing I had been fortunate to work at a company that paid at the top percentile, and I’m a realist. I prepared myself to be flexible,” explained Kascsak, who resides in Austin, Texas. “I’m fine with the pay now because I’m in the environment I want to be in with great people.”
While the tech industry grapples with these issues, the broader labor market has remained relatively stable over the past two years. Despite a slight uptick to 3.9% in February, the unemployment rate has largely hovered around this range since early 2022. Moreover, the U.S. economy added 275,000 jobs in February, marking the third consecutive month of surpassing 200,000 new jobs.
AI Engineers See Booming Job Market
The sentiment in job markets is a mixed bag. Glassdoor’s Employee Confidence Index, which gauges employees’ outlook on their company’s business over the next six months, hit its lowest level in February since 2016.
Within the tech sphere, discussions about layoffs on Glassdoor have surged more than fourfold in the past two years, with a 12% increase last month compared to the previous year.
However, ZipRecruiter’s Job Seeker Confidence Index has been steadily climbing since mid-2023, reaching its peak in the fourth quarter since the second quarter of 2022.
Yet, within the tech industry itself, there’s a stark contrast in the current landscape. Lee from Layoffs. FYI noted that AI is fueling a “resurgence in rapid hiring and expansion,” even amidst ongoing layoffs elsewhere.
Salaries for AI engineers saw a 12% increase from the third to the fourth quarter last year, with the average salary for a senior AI engineer nationally surpassing $190,000, according to Comprehensive.io.
In November, Mittal found himself laid off from the AI lending company Upstart, where he served as a software engineering manager, overseeing interviews. Mittal observed a significant rise in the hiring process’s rigor amidst the layoff wave.
“There was a lot more pressure on us to basically raise the bar higher and higher,” he noted. “Previously, someone with four years of experience would have had a decent shot at a good job. But now, they’re competing against individuals with six, seven, or eight years of experience for the same role.”
Mittal, originally from India and residing in the Chicago area since 2007, faced a different kind of pressure due to his H-1B visa status. Under this visa, he had only 60 days from the end of his employment to secure a new tech job in the country.
“If I have to pay my bills by driving an Uber or working at McDonald’s flipping burgers for four months, that’s fine,” he said. “But that option isn’t available to me.”
Mittal managed to secure a separate B-2 tourist visa, granting him an additional six months to find employment. However, the process wasn’t cheap, as he estimated spending around $8,000 on legal and administrative fees.
Despite applying for around 110 jobs, Mittal hasn’t had much success, attributing it to employers’ hesitance or inability to sponsor visa holders.
“It seems like the possibilities are pretty slim right now, even though I see hundreds of postings every single day,” he remarked.
Bill Vezey, laid off by eBay in January after a 13-year tenure as a software engineer, emphasized the importance of adapting to the “new game” of job seeking, which differs significantly from what he recalls.
“Success isn’t just a numbers game,” said Vezey, 64, based in Santa Cruz, California. “It’s a blend of how well you present yourself, your networking reach, including access to the hidden job market.”
Vezey remains hopeful about returning to his former employer and staying in the tech industry.
“Despite the challenges life throws at you, I remain optimistic,” he stated.
Powers, like many others interviewed by CNBC, spends her days tailoring resumes, scanning job boards, and applying for new positions.
She networks by reaching out to recruiters or hiring managers connected to each role, although some recruiters have shown fleeting interest, quickly ghosting her.
While she’s had a few interviews, Powers turned down one job offer. The position required office attendance, entailed a more than 50% pay cut from her previous job, and posed childcare challenges.
“There’s a looming sense of uncertainty,” Powers admitted. “There comes a point where funds deplete, and the prospects turn grim.”
Nonetheless, Powers remains determined: “Giving up won’t land me a job.”
