OH: Big Tech loves layoffs, software engineers suffer
In 2021 and early 2022, software engineering was the one job market everyone was trying to get into. Every other person I spoke to on campus wanted to be a software engineer or some other branch of computer science. Even students who did not pursue software engineering were at least encouraged to learn how to write code.
Fast forward to 2024, and no one is as enthusiastic about pursuing software engineering as people were in 2021. When you read or watch news about the tech industry, it usually centers around the massive layoffs of coders and software engineers a giant tech company has executed.
Every Big Tech company imaginable has announced at least one large layoff of employees within the past two years. In early 2023, U.S. tech industries cut more than 190,000 employees from the workforce, and more than 75 tech companies, including Google and Amazon, laid off at least 20,000 employees. The reason behind these high numbers is a lot more sinister than what the news would say.
Major news outlets, the government and tech CEOs are doing their best to downplay the alarming number of layoffs during the last two years and the lack of jobs for upcoming software engineers.
Betsey Stevenson, a professor in the Gerald R. Ford School of Public Policy and the Department of Economics at the University of Michigan, believes this high amount of layoffs is simply the economy correcting itself due to the oversaturation of tech workers.
Considering she worked in the U.S. Department of Labor during former President Barack Obama's administration and has ties to President Joseph R. Biden Jr.'s administration, it would be in her best interest to talk about how great the economy is doing without accounting for the vast majority of citizens currently.
Jason Greer, founder and president of Greer Consulting and Labor Relations and diversity expert, said on CNBC News, "I think that the market rewards layoffs. I also think there (was) a certain amount of bloat that happened, especially during COVID-19," he said. "But I think there is something else at play. Artificial intelligence is really at play here."
Greer is a consultant who advises massive corporations regarding employee relations and workforce diversity. His website lists well-established companies under his advisory, but it currently does not list tech companies. This only ignites more questions regarding AI's current capabilities.
Artificial intelligence does not have the skill to write complex codes that software engineers can. A software engineer must tell AI what to code for it to write a functioning code. While it may remove some burden coders have to carry, AI is far from coding at the level of a trained software engineer.
The mass number of layoffs is not just the labor market correcting itself, nor is AI replacing software engineers, human resources and other white-collar jobs. It is an ongoing trend for Big Tech companies to trim off the bulk of their workforce for mass profits.
Up until 2022, companies were under the business model of hyperspecialization. Hyperspecialization is the business model where different groups of employees focus on one particular thing.
Investors looked at companies that hire more employees as signs of growth, which raised the stock price in return. It was not until April 12, 2023, when Elon Musk announced that he would expel more than 80 percent of his employees on social media platform X out the backdoor.
While getting rid of hyperspecialization looks optimal, it makes getting a job nearly impossible for almost everyone involved in software development due to companies being now reluctant to hire new talent with no prior work experience.
Since Musk's announcement, Amazon, Google and Meta announced multiple layoffs throughout 2023 and 2024. On February 6, Amazon laid off approximately 27,000 employees in 2023 alone. On January 17, Google CEO Sundar Pichai told his employees to expect more role eliminations following the layoff of 12,000 employees in 2023. On January 30, UPS announced that 12,000 of its employees would be cut.
Companies not only removed the jobs of hundreds of thousands of tech workers, but they also stunted the growth of future software engineers. The economy is doing better than ever, but that only applies to massive corporations.
For the upcoming software engineer, this spells a downward trend for their job security and skillsets they learned throughout college. Unfortunately, this trend is not just limited to the tech industry. Many jobs considered white-collar and influenced by big corporations are in danger of being replaced if this trend of layoffs does not stop shortly.
Editor's note: The article originally stated Jason Greer's title as a social worker. The article has been updated to correctly describe him as a labor relations and diversity expert.
Jesse Oh is a junior in the School of Arts and Science double majoring in Economics and Journalism. His column "Get Your Money's Worth" is published every other Wednesday.
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