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566,539 tech workers were laid off from 2022 until today.
370,477 of them were from the US.
Highly educated, competent, experienced people. A lot of them were among the people who built the everyday apps that we use, some even helped build up the actual Internet infrastructure. The layoffs are still going on.
Reasons shown for these layoffs vary from overhiring in the pandemic period to AI impact. But the reality is that the tech sector is not awash with cheap cash anymore and the old investment & stock market paradigm that floated the US tech sector is gone.
As a result, all the startups and even established tech megacorps are laying off people to float their valuations and stock prices. An irreverent, cold-blooded, self-destructive ‘money man’ behavior that seeks only to shore up the bottom line at the cost of their organizations’ well-being, their users, the Internet, and society in general.
It won’t get better. What forced the interest rate hike to happen is not going to go away. Many countries moved to trading in their own currencies and reduced their dollar reserves, causing an influx of unused dollars which caused inflation. The investment and stock market paradigm in the US has been confirmed to have been floating on the unending cheap money entering the US economy via the Federal Reserve and private banks, depending on the reserve currency status of the dollar to avoid inflation. Now that the uncontested reserve currency status is gone, nothing can hold the tide aside from higher interest rates. The rate will need to stay high to prevent inflation.
Even if the Fed plays with the interest rate and pushes it up or down a little for anything, like trying to stimulate the economy by reducing it a little before the election or pushing it higher than how it is to stop inflation after the election, the rates will generally stay high to combat inflation.
This means that cheap money won’t be coming back.
Things are unlikely to go back to how they were before this paradigm change — which means that what was there before, an environment in which large tech companies hiring hundreds of thousands of techies and VC-fueled startups racing to grab some of that talent, won’t be coming back. The behavior of tech corporations and startups in this period showed that they didn’t care about anything other than inflated stock prices and valuations as they discarded even their most accomplished people for the sake of financial numbers for the next quarter.
That old environment is gone, along with the comfortable economic environment it provided to tech workers. The big and small players that created that environment showed that they didn’t care about anything but numbers. Even that environment itself was a gigantic machine to monetize the whole society at the cost of a lot of things that made it a society. It won’t be missed.
This means that…
Tech Workers Must Create Something New In Its Place
Laid-off tech workers must start building the new tech paradigm that will take the place of the old, defunct one.
A new, better paradigm that would prioritize its participants, from tech workers to users, from society to the environment. A paradigm that doesn’t seek to maximize the imaginary profits of a tiny minority at the cost of everything else. A paradigm that seeks to make the world a better place as it was intended to be at the start.
The big tech companies laid off entire startups’ worth of networks of professionals in one go. This environment is ripe for creating a new paradigm through new startups, and it is already happening.
This is a chance for tech workers to do what they weren’t able to do in their former, corporate positions. They can start grouping with those who are close to their philosophy, create companies, even cooperatives that have principles, and build what is needed to take society to ‘the next level’ — fix real problems and bring about real change.
They definitely can do that. They are knowledgeable, educated, and experienced. They did build a lot of the things that people use today. This time, they can build what they want to build instead of what the ‘money man’ wants them to build.
Sure, any organization must be financially viable to be able to continue to exist. The new startups of new tech will also have to make sure that they are financially viable. But they can avoid pandering to outside investors who don’t care about technology and who are in it only for the quick returns by hollowing out everything that the early tech stood for. A people’s tech as opposed to the ‘money man’s tech. A tech that democratizes everything and gives power to the people instead of obscenely rich, detached, sociopathic investors.
The laid-off tech workers can take tech back from detached, sociopathic investors.
But To Do That Everybody Must Turtle Up
Long-term economic viability and resilience will be important for everyone in tech. Reducing costs and optimizing lifestyle will be important as everyone looks for new opportunities. There isn’t any telling how fast the new paradigm can come to being and the old one is already kaput.
Everything ranging from preserving savings in reliable, risk-averse ways to reducing costs will help economic resilience and make it easier to adapt to the new economic paradigm. For those who find new jobs, for those who yet can’t, and for those who want to use this opportunity to build something new alike.
However, there is an elephant in the room:
It’s not possible to live in the cities and hubs that the cash-flush investment environment created. This environment inflated the price of everything ranging from housing to groceries in tech hubs like San Francisco, and these locations passed as ‘viable’ places to live only because the inflated cash-flush economy was supplying enough wages to the tech workers to stay afloat in the over-inflated economies of these hubs before.
The cheap money is gone but the sectors that leeched off of that cheap money like black holes, sucking gobs of money out of that economy through the inflated prices they imposed on the tech hubs, are still there. Like the real estate monster, which became a black hole that sucks gobs of money from the economy which should have been invested into technology instead. It wants to keep doing it — the money is not there anymore, but it still does not relent. Like all the other sectors that sucked money out of that tech economy and inflated the cost of living in those tech hubs and made them unlivable.
As the cash-flush economy is unlikely to come back, it’s not feasible to turtle up in these locations. The vultures of the old economy will surely try to suck out any money that is left in the pockets of everyone, leaving aside the pockets of laid-off tech workers.
As a result, tech workers must seek relocation to cheaper but viable locations in other states or the outskirts of the tech hubs. Be it by getting remote positions, be it by relocating to cut expenses to increase their runway if they are going the route of making their own startup. Many states between the coasts, and even the outskirts of California or even the tech hubs themselves can be viable locations thanks to the remote work revolution. Some of these locations can even transform into minor tech hubs themselves in the process.
Currently, there is a major push to force people to return to office, mainly done through the pressure of real estate lobbies and local governments that are beholden to them. Parts of the exec class who still couldn’t break out of the old ‘bums in seats’ paradigm also give a hand in that push, despite the amount of funds that are sucked out of companies’ coffers by the real estate industry — the money that all tech corporations sorely need. This definitely complicates the situation as it makes it more difficult for the tech workers to relocate to cheaper locations. Being prevented from reducing their costs by the very tech companies that suffer from those costs — a contradiction in itself.
But for anyone who can get remote positions and for anyone who would want to build a startup or something new, relocation is likely the better option. It would help cut a lot of living costs across the board and help economic resilience in these uncertain times. It would definitely help those who are building something new.
Surely it is much more difficult to relocate when you have a family or have more or less a life in a given location or when there is anything that ties you to that location. In such cases, it becomes a case that needs longer-term planning than just turtling up. But relocation is still an option that should be considered.
Aside from the biggest elephant in the room, many other things can be done to turtle up to boost economic resiliency. From canceling unneeded subscriptions to cutting ‘lifestyle inflation’.
While turtling up by cutting costs on one side, the laid-off techies must augment their income in whatever way they can as they look for the next opportunity. Anything that allows them to stay in tech works — taking on contract work, taking on temporary positions, even other forms of generating income without getting distanced from tech too much. Of course, protecting the value of any savings would be at the top of the priority list.
A New Paradigm Will Come To Being
A new paradigm will emerge regardless of the tech workers making it happen and determining its nature or not. It’s much better for tech workers to take the lead in the new paradigm and determine its nature than watching from the sides as other interests take control and dictate how the new paradigm will be and the place of tech workers in that paradigm.
The situation at hand provides the opportunity for tech workers to build the world that they will live in while prospering in the process. A paradigm in which they can work without any weight on their conscience and build what they want to build.
It can be done. But to make it happen, everyone must turtle up, plan and execute patiently, and play for the long term.
