Tech industry tribulations
As the layoffs continue in the FAANG tech ecosystem, perhaps our over-rotation on STEM to the detriment of much of the value to higher education can be corrected, and more people can thrive
Look, I am an old fart. I graduated high school in 1983, before the end of Reagan’s first term in office. Back then, the “Tech” industry was mostly mainframes, COBOL programs, and a nascent hobbyist pastime was building and bragging about your “personal” computers. Real men looked down upon the slick Apples, Ataris, and Commodore PET computers, instead building Frankenstein’s monsters out of S100 bus cards, Z80 CPU’s and teletype terminals running CP/M as an OS.
This is what I graduated into. The IBM PC was new, expensive, and not really hobbyist friendly; we hardly expected it to become ubiquitous.
Everybody I went to high school with expected to either join a corporate workforce, a government job, or - quite likely - go on to one of the myriad service or similar blue collar jobs (mechanic, welder, factory worker, etc.)
Fast forward to the aughts, and Tech had become the premier career that everyone and their parents wanted to pursue. When I was in college, the degree program around “Computer Science” was new, and really esoteric. Now, it is so mainstream and over done that it isn’t uncommon that you find a cab driver who has a CS degree, and is looking to break into a related role. Even though Computer Science is not a guarantee to becoming a software engineer (mostly a programming role that is increasingly looking like it is going to be decimated by the rise of generative AI) parents, school guidance counselors, and tech luminaries are hyping the shortage of staff for these new-economy roles.
Hiring exploded during the Pandemic, all the majors, the vaunted “FAANG1” companies with one exception went on a hiring binge2. This led to these engineers to begin to believe they were untouchable. That the demand curve was permanently in their favor, that it was perfectly reasonable to change jobs every 18 to 24 months to seek more money, stock, and title/grade elevation. Whole ecosystems sprung up where these engineers began sharing strategies to hop onward and upward, and banks of internal recruiters were constantly scouring sites like LinkedIn, searching for more talent for their tech major company to hoard.
And hoard they did. A lot of people changed jobs. I work at what is considered a “stodgy” old company in tech, and the last company wide meeting it was revealed to us that a little over 60% of our workforce were hired since the start of the Pandemic in 2020.
Let that sink in, nearly 2/3 of an employment of nearly 75,000 employees had turned over in less than 4 years. That is FUCKING insane. Seriously, that feels like way too much churn to me, but what the hell do I know.
In 2022, in the midst of this turnover and churn, I had probably my best performance review, a very generous pay packet increase, and frankly a large bolus of RSUs3. In the same exercise in 2023, I got a great review, but a modest raise (1.5%) and a much more compact grant of RSUs. Apparently, the frenzy and competition in acquiring talent led to much less interest in the executive team to try to retain what they have, as all the companies who were strip mining our teams for their hoarding had been on a literal tear of reducing staff, increasing the talent pool to recruit from.
Suckage.
Why I am writing this…
Today, I was reading an article in the Washington Post about why the tech companies are continuing to lay off people in droves while the economy is still on fire. Yesterday’s numbers (February 2, 2024) showed that employers added more than 353 thousand new workers in January, and also revised upward the December numbers.
By any objective measure, employment is plentiful, the economy is humming along, and recession (regardless of how many on the Right whinge that its close) seems to be far down the list of worries.
Part of this is due to the majors all way over-hiring in the pandemic era, but it is also due to ZIRP being retired, and interest rates being in a range of “normal”. The increased costs to borrow, leads to more difficult decisions on what to fund. Pet or vanity projects from the executive ranks are under more scrutiny, and being unwound, leading to huge swaths of engineers, program managers, and even many layers of middle management being evaporated.
Here in Silicon Valley, the engineers, and related staff who enjoyed amazing power over employers are beginning to realize that those comp packages that started at about $300K, and by the time you got to L7 or so could easily reach near $1M in total compensation, are no longer achievable.
Oh sure, there are still people with those roles, and those pay packages, but gone are the days that you could hop your way up, leaping like a frog from lily pad to lily pad so that by the time you are 5 years into your career arc, you have the L7 pay grades from one of the majors, enough stock to buy a nice home in Palo Alto, and able to command what you work on when are in the rear view mirror, no longer to reappear.
I read this article, and then dove into the comments, and this one in particular caught my eye:
While this is true, it is not the whole picture. When I was growing up, a wee lad in Sunnyvale, our trash collectors drove one of those old trucks, with the big maw in the back, where there were usually a trio of trashmen, one to drive, and two who would feed that maw with the contents of the garbage cans that homeowners would place on the curb for pickup.
But today, the trash collectors are a single driver, in a truck with automation to manhandle the trach bins provided by the city, and they can work more neighborhoods, with 2/3 fewer workers than in the 70’s when I grew up.
No, I don’t think that garbage collector is going to need enough people to handle the displaced tech workers.
With the rise of generative AI, an increase in discipline around staffing, and the rising cost of capital, the heady days of the 2010s and early 2020s in tech are gone. Success in the future generations will require a mélange of skills, skills that are often better imparted by the softer education, the classics, humanities, and less of the hard STEM.
This strikes me as a good thing in general.
It also makes me glad that I am nearing the end of my career. If I was in high school, or had high school aged children, I am not sure what the fuck I would advise them to pursue. One thing is certain, the STEM majors are no longer the fast-track to a solid, safe career.
Last thoughts
For all those who are down on tech, who have possibly been soured on the FAANG cabal, there is hope. Virtually every industry, and every company now has tech intertwined in it. Digitization projects, evolving businesses to encompass the benefits of technology is everywhere, and your skills you learned at the FAANGs are in demand.
No, you will not make the stratospheric salaries and benefits, but you can get a solid career, more staid, and stable. And you are likely to be able to live in a region of the US that is much more affordable than the SF Bay Area.
Do not despair, but look for one of those roles, and tuck into a rewarding, less “hustle” related career and thrive. It can and does work out.
Facebook, Amazon, Apple, Netflix, Google, although I believe it is a missed opportunity to not rename this to MANGA with Meta replacing Facebook, but I digress…
The exception? Apple. While don’t work there, I have read reports that they tempered their strategy to ensure they didn’t over hire. Bully for them, I guess
RSUs are restricted stock units. In the early 200’s after the disaster at Enron, and many scandals of backdated stock options in big companies (in and out of tech), the Sarbanes-Oxley act made the traditional stock options almost impossible to use for rank and file employees (they are still common in executive ranks) due to changing the tax rules. Us mere mortals now get real stock, and the net benefit for me is that I no longer worry about huge fucking AMT bills (Alternative Minimum Tax).
That shit sucked for us commoners.