Tech layoffs shock young workers. Older people? Not so much.
SAN FRANCISCO >> When Lyft laid off 13% of its workers in November, Kelly Chang was shocked to find herself among the 700 people who lost their jobs at the San Francisco company.
“It seemed like tech companies had so much opportunity,” said Chang, 26. “If you got a job, you made it. It was a sustainable path.”
Brian Pulliam, on the other hand, brushed off the news that crypto exchange Coinbase was eliminating his job. Ever since the 48-year-old engineer was laid off from his first job at the video game company Atari in 2003, he said that he has asked himself once a year, “If I were laid off, what would I do?”
The contrast between Chang's and Pulliam's reactions to their professional letdowns speaks to a generational divide that is becoming clearer as the tech industry, which expanded rapidly through the pandemic, swings toward mass layoffs.
Microsoft said on Jan. 18 it planned to cut 10,000 jobs, or roughly 5% of its workforce. Two days later, Google's parent company Alphabet said it planned to cut 12,000 jobs, or about 6% of its total. Their cuts followed big layoffs at other tech companies such as Meta, Amazon and Salesforce.
Millennials and Generation Z, born between 1981 and 2012, started tech careers during a decadelong expansion when jobs multiplied as fast as iPhone sales. The companies they joined were conquering the world and defying economic rules.
Baby boomers and members of Generation X, born between 1946 and 1980, on the other hand, lived through the biggest contraction the industry has ever seen. The dot-com crash of the early 2000s eliminated more than 1 million jobs, emptying Silicon Valley's Highway 101 of commuters as many companies folded overnight.
“It was a bloodbath, and it went on for years,” said Jason DeMorrow, a software engineer who was laid off twice in 18 months and was out of work for more than six months. “As concerning as the current downturn is, and as much as I empathize with the people impacted, there's no comparison.”
Tech's generational divide is representative of a broader phenomenon. The year someone is born has a big influence on views about work and money. Early personal experiences strongly determine a person's appetite for financial risk, according to a 2011 study by economists Ulrike Malmendier of UC Berkeley and Stefan Nagel of University of Chicago.
The study, which analyzed the Federal Reserve's Survey of Consumer Finances from 1960 to 2007, found that people who came of age in the 1970s when the stock market stagnated were reluctant to invest in the early 1980s when it roared. That trend reversed in the 1990s.
“Once you experience your first crash, things change,” Nagel said. “You realize bad stuff happens and maybe you should be a bit more cautious.”
For Gen X, the dot-com collapse hit early in their careers. From 2001-05, the tech sector shed one-quarter of its workers, according to an analysis of Bureau of Labor Statistics data by Comp-TIA, a technology education and research organization.
The layoffs that swept the industry were worse than the recession of the early 1990s, when total jobs in the tech sector fell by 5%, and the global financial crisis in 2008, when the workforce contracted by 6%.
In 2011, the tech sector began a hiring boom that would last a decade. It added an average of more than 100,000 jobs annually, and by 2021, it had recouped all the jobs it lost when the dot-com bubble burst.
The biggest job increases in tech came after the pandemic started, as companies rushed to fulfill surging demand. In 2022, the sector added nearly 260,000 jobs, according to CompTIA, the most it had added in a single year since 2000.
Tech's job increases continued last year even as big layoffs started, though it is unclear if that trend has stretched into this year. New job opportunities were a factor as nearly 80% of laidoff tech workers said they had found a new job within three months, according to a survey by ZipRecruiter.
“We're seeing the hiring mania of the pandemic being corrected for — not the popping of a bubble,” said Andy Challenger, senior vice president of career transition firm Challenger, Gray & Christmas.
For Pulliam, losing his job at Coinbase was an opportunity. He funneled his severance money into his own business, Refactor Coaching, a career coaching service for software engineers.
“This is a gift,” Pulliam said. “I don't think that story is told. It's always doom and gloom.”
Austin Bedford was one of about 8,000 people let go from Salesforce. A native of East Palo Alto, he studied computer design because he hoped to join one of the profitable companies in his backyard. The job he landed at the company in 2021 fulfilled a dream. He never imagined he would lose it so soon.
“I was shocked,” said Bedford, 41.
Although disappointed that he was laid off, he said he was trying to view being out of work as a “blessing in disguise” and intended to be selective about his next job.
“There's something bright around the corner,” Bedford said. “I just need to have faith.”