The email landed on Nov. 4. The subject line: Your role at Twitter.
“It was my first time getting laid off,” says Grace-Ann Baker, a former director of product management at the social media company. As it turned out, Baker wasn’t alone. New owner Elon Musk would eventually let go of nearly two-thirds of the 7,500 employees he’d inherited at the beleaguered company. And in the coming weeks and months, the trend continued across the broader technology sector. Just as fast as tech companies had hired employees during the pandemic, they now quickly shed them as the economy slowed.
At Amazon, more than 18,000 people were laid off; at Google parent Alphabet, 12,000; at Facebook parent Meta, 11,000; and at Microsoft, 10,000. Smaller companies downsized too, with layoffs announced at payments provider Stripe, online video hosting service Vimeo, and e-tailer Stitch Fix.
All of a sudden, legions of tech workers—once in demand and showered with big salaries and generous perks and bonuses—found themselves looking for jobs, in the unfamiliar position of having to update their résumés and wait for callbacks from recruiters.
But instead of struggling to find new work, many are discovering that their skills are still a hot commodity. Many employers outside tech, some of which had trouble attracting tech talent during Silicon Valley’s decade-long boom because of their stodgy reputations and lower pay, are scooping up unemployed software engineers and web designers now that the tech industry is in retreat.
Those non-tech employers? Think sectors like health care, finance, and government. They offer more stability and, in some cases, the opportunity to join huge tech teams built up over the years.
At Walmart, more than 20,000 engineers, UX specialists, and data scientists currently work in core areas, from e-commerce to information security. “It’s an exciting time for retail tech,” says a company spokesperson in unabashed recruiter mode.
At financial services giant JPMorgan Chase, which already employs 55,000 technologists globally, executives are also upbeat about attracting tech workers—and about retaining the ones they have. “In terms of trends, we are seeing more technologists staying put, with attrition decreasing to pre-pandemic levels,” Lori Beer, JPMorgan’s global chief information officer, tells Fortune via email. “Candidates today have fewer competing offers.”
The contrasting realities between tech and other industries is encapsulated in the layoff numbers. In 2022, tech companies laid off more than 97,000 employees, representing a 649% increase from cuts in the sector the year before, according to outplacement services firm Challenger, Gray & Christmas. Meanwhile, employers across all industries combined cut nearly 364,000 jobs, representing just a 13% increase in overall cuts from the year before. (If tech is excluded, overall layoffs actually declined from the previous year.)
In fact, despite the current economic uncertainty, the overall U.S. economy managed to add 223,000 jobs in December alone, according to the Bureau of Labor Statistics. In other words, the job market is still healthy—just not in the tech sector.
The reasons for the divergent trajectories are many. During the boom years, many tech companies went on hiring sprees, particularly during the pandemic in order to meet a spike in demand from consumers and businesses mired in lockdowns.
“There is hiring out there, and most people I know are finding jobs.”
Grace-Ann Baker, former Twitter employee
Now, with pandemic precautions largely abandoned, and the economy sputtering because of recent interest rate hikes, tech executives are cutting costs by eliminating jobs.
Even on the government side, which previously had trouble luring techies, the layoffs present a rare opportunity. “We’re getting the word out that we’re looking for people,” says Kurt DelBene, assistant secretary for information and technology and CIO of the Department of Veterans Affairs.
The VA currently has more than 700 job openings for tech workers, including on its cloud infrastructure and cybersecurity teams. And according to DelBene, there is a noticeable increase in the number of inbound inquiries he’s receiving through LinkedIn and elsewhere. He’s also received “hundreds” of leads from recent virtual job fairs the VA has hosted.
“We are the largest health care provider and the largest financial institution in the U.S.,” says DelBene. “You want to go to a place where there are really, really hard problems to solve? That’s the organization we’re running.”
To be sure, government jobs haven’t historically paid as well as the private sector—even when it comes to tech talent. DelBene says that in the Washington, D.C., area, the gap between what an engineer could earn at the VA versus at a tech company is as high as 66%. But the VA and other federal agencies have been pushing the government to allow a “special salary rate” for specific job functions, and so far, it appears to be working: In January, the change was approved for certain tech positions. “I want to make this the best place [for tech employees] to work in the federal government,” says DelBene.
There’s another type of organization that’s attracting some of the laid-off tech talent: tech companies that don’t often make headlines. They’re big, but their lower profiles can make it more difficult to compete for talent against buzzier names in social media and fintech. “I’m hearing a lot of interest in places like Intuit and Adobe,” says Jana Rich, founder and CEO of Rich Talent Group, an executive recruiting firm, referring to the tax-software maker and the company behind tech tools like Photoshop. “These are very well-run companies, profitable, with growth and high retention rates, but they are also continuously evolving their business models. You are going to gain skills and be promoted there.”
One area that doesn’t appear to be generating as much interest from the laid-off crowd? Early-stage startups. It makes sense: According to Rich, candidates today are interested in the financial health and viability of a company. A young startup doesn’t have much of a track record, to begin with. But it also may not have a future, if it needs a fresh round of funding anytime soon. Because of the economic downturn, venture capital has slowed considerably for new tech companies.
Of course, not everyone is rushing to land a new gig, owing partly to the relatively cushy severance packages most tech companies give laid-off employees. At business software giant Salesforce, for example, the 8,000 workers who were cut recently have been promised five months of pay, plus health insurance. Meta is offering 16 weeks of pay and benefits, and an additional two weeks for every year worked at the company.
The packages soften the blow of layoffs, for sure, as does the fact that techies are still in high demand across different sectors. But getting laid off is no fun, and some out-of-work employees are worried that, with the economy souring, other industries will pull back as well in the coming months.
“Emotionally, I was bracing myself for it,” says one former DoorDash tech employee who did not want to be mentioned by name. (The restaurant delivery app announced layoffs of 1,250 employees in November, representing about 6% of its workforce.) But when the moment came, and she realized she was locked out of her work accounts: “There is a slew of emotions that you feel.” Several weeks after the layoffs, the former employee says she is still taking her time to decide on her next steps. And opportunities exist, especially for techies who are willing to try something new: “I’ve spoken with a few headhunters and recruiters, and they are saying the same thing—that nontraditional tech companies are bullish on tech talent right now.”
As for Baker, formerly of Twitter, her reaction to being laid off, or at least one of the emotions she felt, was relief, given all the tumult at the company amid Musk’s takeover. There was a sense of camaraderie as well, considering that so many people were going through a similar experience. She’s taking time to figure out where she wants to work, but is optimistic given the interest—and interviews—she’s already getting. “There is hiring out there, and most people I know are finding jobs,” says Baker, whose CV includes tech giants like Cisco and Google.
As for what her next role, and company, will be? That’s still TBD. After three years at Twitter, she says, one thing is for sure: “I’m open-minded.”
Land of layoffs
Tech companies big and small have been laying off employees in recent months. Here are some of them and the number of jobs they have cut:
Amazon
18,000
Meta
11,000
Microsoft
10,000
Salesforce
8,000
Cisco
4,000
Twitter*
3,700
Doordash
1,250
Stripe
1,000
Coinbase
950
Carbon Health
200
Only the first round of Twitter's layoffs is included.
This article appears in the February/March 2023 issue of Fortune with the headline, "The great tech-job reshuffle."
