Students have been asking me recently about tech companies cutting back and how it will affect their job prospects in the future. It’s a good question to be asking, but one that has a few answers and nuances to it.
First off, there is still a dramatic shortage of cybersecurity related professionals to fill jobs. And secondly, most of the companies announcing layoffs are behemoths in the industry and small and medium companies, as well as government agencies, are hiring at a record pace. And when it comes to academia, it is our job to modify curriculum as needed to meet industry demand, and we will do that if necessary.
Tech Layoff Reasons
So what is the real reason for tech layoffs? Various sources from the tech sector offer the same string of answers:
- Inflation has stretched the almighty dollar much thinner for the consumer. People who were ordering items before for convenience reasons instead of necessity have slowed down.
- COVID-19 created a bubble, which was a boom for the tech industry. After the initial shock, job loss everywhere stabilized. Workers relied on more IT-based tools to get the job done from home. Consumers ate at home, shopped at home, and entertained themselves at home. As the world slowly returned to normal, services industries started to get healthy while Silicon Valley demands cut back. As a result, companies like Amazon didn’t need nearly as many employees to function.
- The Federal Reserve started hiking interest rates in response to inflation. This in turned affected the tech sector dramatically who borrows from outside agencies.
- Competing for talent became a quantity sport. I know this act – I have seen it all my life in the aviation industry. Companies over hire specific talent sets so they can monopolize the trade and then weed out the employees who are below their standards. It is a cost of doing business and less risky than choosing one specific candidate.
Impact of AI on Jobs
When looking at the reasons for the cutbacks, the proverbial elephant in the room is the impact of Artificial Intelligence on the job market. Depending on who you talk to, what you read, and the podcasts you listen to, there is a wide variety of opinions like these:
- Microsoft and others are laying people off so they can use capital to buy, research and develop products such as ChatGPT. Once that happens, different tech jobs such as managing systems will be created. Most AI proponents and big tech swear by this prediction.
- There is little correlation between the layoffs and the AI boom. Most of the positions cut were not affected by neural network learning.
- The robots are taking over and we will soon have to defend ourselves, let alone worry about employment.
I’m not sure about any of those positions being totally true, but I do sense AI development is moving along far more rapidly than anticipated by many experts. The best advice I have for those working or wanting to work in the tech sector is educate yourself by studying reputable sources (not necessarily CEOs), adjust your course of study if needed, and take advantage of every learning opportunity that you can which broadens your talents.