2024: The Year of the Layoffs

As the year comes to a close I think I can safely say that 2024 has taught us all a very important life lesson: layoffs are the new normal of the technology industry. 2024 has seen massive layoffs across the entire industry across multiple professions.

As someone who has been in industry across multiple decades I can remember a few other downcycles in this industry:

• The collapse of the defense industry in the early 1990s -- for years the Cold War, and the Space Race fueled the need for engineers. When the Berlin Wall came down, so did the sense of urgency driving these two industries.
• The Dot Com crash of the early 2000s -- for a period of almost 7 years it seemed as though anything with the world "internet" in it was destined to IPO and make its founders rich. Then reality settled in. What goes up must ultimately come down.

The harsh reality is the technology industry is extremely volatile. Positions at technology firms tend to last in the range of 1 to 3 years. The average tenure at a company is about 2 years. The days of staying at a company for multiple decades, and ultimately retiring from that company are long gone. Nowadays, if someone has been at a company for 5 years you might start calling them "old timer."

So why is the technology industry so transient? It seems that many jobs are just one layoff cycle from going away. The answers are complicated. But here are a few possible reasons:

1. The business models that fuel technology companies are highly volatile. Many companies take investment money, and achieve high burn rates. The idea being a high risk will yield a high reward. Sadly, risky situations often do not pan out. Companies run out of money, and the market for their product or service does not fully appear.
2. The technology industry is cyclical and is coupled to the current economic conditions of the country. In short: in a good economy companies hire, and in a bad one companies fire.
3. During a boom companies often over hire, and in particular, they preemptively hire in order to snap up quality talent before the competition gets them. When the boom ends the company will be forced to jettison some of those key hires.
4. Investment pressure is constant. Investors demand results and they want them as soon as possible. They want quarter over quarter growth. Each quarter should be more profitable than the last. One of the quickest ways to improve profitability is to reduce expenses.
5. Mergers and acquisitions -- sadly, if your employer is acquired, there is a high probability that once the merger is done, someone is going to lose their job. In nearly every merger I have witnessed within six months of completion there were layoffs.
6. Globalization and outsourcing -- More and more companies are embedding outsourcing teams directly with their internal staff. This reduces the number of roles being opened for FTE's.

So what does it all mean? What does a person do about this in order to retain viability in their career? Here is the advice I would give to anyone who is entering this profession:

1. Your relationship with your peers, leadership, and so forth will transcend your time at a particular employer. These are the people who will give you references, and recommend you for your next position. You will likely encounter one of your peers a 2nd time in your career. Never burn a bridge. Never speak poorly of anyone. Never bad mouth a prior employer!
2. Be in a constant state of learning. Udemy, Linkedin Learning, and YouTube offer lots of resources. Skills go out of date in six months. Watch a tutorial. Read a book. Stay on top of things. What was a hot skill today will be a cold one tomorrow. All you have to do is look at how software was built just a few years ago compared to today.
3. Be mindful of AI. AI is neither the enemy nor the friend. It is a tool. If utilized correctly, it can be an excellent talent amplifier and enable tremendous productivity. You still have to do the work. You still have to have ability. But AI can help you use your time smartly to achieve the maximum results.
4. Work on your side hustle! Whatever it may be, have a side hustle. A side hustle will help you develop new skills, and in particular skills outside of your profession. Secondly, positions come and go, a side hustle can help fill in the income gap.
5. Pre-plan how you plan to retire. Sounds silly doesn't it? All tech workers have a finite working span. Understand when you need to bow out. You don't see a lot of older staff in this industry. You will never attend a retirement party. You will never see someone get up from their desk and announce their retirement. How do I know this? Because in multiple decades in industry, I have never witnessed it. Most technology workers simply stop getting hired, and that constitutes retirement. Be prepared for the day that this will happen. Save money. Invest smartly. Be prepared to launch a "second career" when the time comes.
6. Treat your career like it is your own personal company. Set growth plans and milestones. Set revenue goals. Understand where you need to be at what age. Know when to make strategic pivots based upon market conditions.

Going into 2025, hear is hoping it produces a better economy, more opportunity, and a chance for everyone to find their fortune.