Laid-off techies face ‘sense of impending doom’ with job cuts at highest since dot-com crash

Allison Croisant, a data scientist with a decade of expertise in technology, was laid off from PayPal earlier this year, joining the ranks of the unemployed in her field. Croisant describes the current job search procedure as “insane.”

“Everybody else is also getting laid off,” said Croisant, who resides in Omaha, Nebraska, and works remotely for PayPal.

Her sentiment is reflected in the figures. According to the tracking website Layoffs.fyi, more than 50,000 employees have been put off from over 200 tech companies since the beginning of the year. It’s a continuation of 2023’s main theme, which saw over 260,000 workers lose their employment at almost 1,200 tech companies.

Alphabet, Amazon, Meta, Microsoft, eBay, Unity Software, SAP, and Cisco are among the companies that have downsized this year. Wall Street has mostly welcomed the cost-cutting measures, pushing many tech stocks to new highs on the expectation that spending discipline combined with efficiency benefits from artificial intelligence will result in increased earnings. PayPal said in January that it would eliminate 9% of its workforce, or approximately 2,500 jobs.

For the tens of thousands of people in Croisant’s situation, the path to reemployment is difficult. According to outplacement company Challenger, Gray & Christmas, 2023 was the second-largest year of job cuts on record in the IT sector, trailing only the dot-com meltdown of 2001. Not since the dramatic failures of Pets.com, eToys, and Webvan have so many tech employees lost their jobs in such a short period of time.

The number of job cuts last month was the largest since February 2009, when the financial crisis prompted businesses to conserve cash.

CNBC interviewed a dozen people who were laid off from IT jobs in the last year or so about their experiences navigating the labor market. Some spoke under the condition that CNBC not use their names or discuss the specifics of their circumstances. Taken together, they portray a picture of an increasingly competitive market, with job postings that feature stringent qualifying requirements and pay lower than previous positions.

It’s a particularly perplexing scenario for software developers and data scientists, who had some of the most marketable and highly coveted abilities in the world just a few years ago but are now considering leaving the sector to find work.

“The market isn’t what it once was,” Roger Lee, the founder of Layoffs.fyi, said in an email. “To acquire a new career, many salespeople and recruiters are leaving technology completely. Even engineers are making compromises, taking positions with less stability, a more difficult work environment, or lower salary and benefits.”

Lee stated that tech pay have “largely stagnated” over the last two years, citing data from Comprehensive.io, a compensation tracker that he recently helped develop.

Croisant’s employment quest included applying for opportunities that received hundreds of applications. She may view the data using LinkedIn’s Talent Insights program, which reveals how many people are competing for an available position.

Furthermore, several job postings required applicants to have advanced degrees or professional expertise in machine learning and artificial intelligence, which is a new trend in Croisant’s labor market experience.

Croisant stated that she applied to 48 job postings and received two interviews throughout her five-week search. She eventually decided to accept a lower-level data analyst position and a $3,000 cut in base pay in exchange for a contract position at a financial technology company beginning 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,” she said. “But I’m still one of the fortunate ones in the end. I have pals who have been seeking for months and have yet to find anything.