58% Tech Hiring Managers Conducted Layoffs Last Year, Expect More in Coming Months

 The technology industry is no stranger to layoffs. First, there was the Great Recession over a decade ago, which affected jobs worldwide. Over the last 3-4 years, the industry has again seen mass layoffs for various reasons, such as the COVID-19 pandemic and the economic downturn. In fact, thousands of tech employees lost their jobs in the last few months due to economic uncertainties.

So, how are these cutbacks affecting the industry and its employees? B2B Reviews recently conducted a study to get some answers. The following are a few insights.

Travel and Food Are the Most Affected Sectors in the Industry

According to GartnerOpens a new window , worldwide IT spending is expected to hit $4.6 trillion this year, a growth of 5.1% from last year. Despite this massive industry size, the American tech sector recently faced major layoffs to adapt to evolving market conditions while maintaining growth. Since last year, technology organizations laid off an average of 22% of their employees. Further, January 2023 saw the worst situation since April 2020 (194), with 177 technology companies laying off employees.

The hardest hit sectors within the industry were travel (31%), food (29%), and healthcare (29%). A few other sectors hit hard by layoffs were healthcare (29%) and finance (23%), with 116 healthcare and 98 finance companies laying off tech employees. About 57 retail companies laid off tech employees.

Most Employees Laid Off Last Year Haven’t Found a Suitable Job

Once a tech employee was laid off in the last year, how quickly did they bounce back? Based on LinkedIn data, the study found that 71% of the employees who were let go last year hadn’t found a new job yet (based on profiles that didn’t have updated employment dates). About 25% found a job within two months, and 4% took 3-4 months. Overall, laid-off tech employees took about 1.4 months on average to find a new job. Regarding male and female employees, 74% of women who were let go couldn’t find employment compared to 69% of men.

When it came to different industries, security (34%) topped the list of fastest bounce-backs, followed by marketing (33%) and real estate (31%). Retail (18%), HR (17%), and crypto (17%) had the slowest bounce-back rates.

Fastest Bounce Backs by Industry

Fastest Bounce Backs by Industry

Source: 2023 B2B Reviews StudyOpens a new window 

Most Laid-Off Employees Tapped Into Savings During Unemployment

Being let go from a job is stressful, especially when employees have several expenses. So, how did employees who were let go in the past two years manage finances during unemployment?

The study found that 69% of unemployed employees tapped into their savings while 37% relied on state unemployment benefits. About 32% relied on their severance package. About 19% also borrowed money from others, while 12% tapped into their retirement fund.

That said, most employees have been looking for jobs after being laid off. About 30% said they even changed industries after being let go from their previous organization. So, how have they been looking for jobs? About 31% looked for jobs on LinkedIn, while 30% searched on Indeed. At least 20-25% of people used networking and referrals to look for jobs, while 18% applied on company websites. About 5% also attended job fairs. Further, 72% of employees turned to social media platforms, such as LinkedIn, Instagram, and TikTok, for job search advice after being let go.

Hiring Managers Want Employees With Knowledge of Data Analysis and Cloud Computing

According to the study, 58% of the surveyed tech hiring managers conducted layoffs last year. Another 18% expected another round of layoffs in the next six months. So, what strategies did they use to ease the burden for laid-off employees?

About 64% of the respondents reported communicating clearly and positively to the employees, while 38% cited collecting and responding to feedback. About 37% also said they established an open-door policy to provide support, and 36% said they addressed the change effectively.

Strategies tech hiring managers used to ease burden for laid off employees

Strategies tech hiring managers used to ease the burden for laid-off employees

Source: 2023 B2B Reviews StudyOpens a new window 

Finding a new job after being let go can be exhausting, but there are certain ways job seekers can make their profiles stand out. For example, hiring managers value certain technical skills and qualities in an employee. The top three technical skills hiring managers value are data analysis (37%), cloud computing (35%), and software development (31%). These are followed by Python (29%) and C++ (21%). The top qualities hiring managers value are a continual desire for learning (53%), being a team player (46%), and being motivated (40%). About 30% also prefer job seekers to have people skills.

Further, hiring managers also prefer certain platforms for hiring candidates. For example, 34% prefer LinkedIn, 29% prefer online job boards, and 16% prefer their company websites. About 17% also prefer referrals.

Key Lessons Learned

The recent and continuing layoffs of tech employees have affected many industries, with major companies losing a significant percentage of their workforce. While companies may choose to let go of their tech employees due to many reasons, hiring new employees can become difficult when the business climate improves. This is because the lack of availability of skilled talent can become a serious challenge, as found by a recent Russell Reynolds study. Hence, organizations should consider retaining valuable employees and retraining and reskilling them. If layoffs are inevitable, companies should consider providing career transition services to assist employees that were let go.

On the other hand, employees who were let go should research, understand the top skills companies are looking for, and consider gaining these skills. Further, they should update their profiles on important job portals to increase their chances of finding new opportunities.

As the tech industry passes through turbulent times, organizations and individuals should balance cooperation and competition to build a resilient industry.

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