Riding the Layoff Wave: Finding Hope Amidst Economic Tides
Are we out of the woods yet?
If you have spent any time on LinkedIn or watched/read the news lately, even if you personally haven’t been impacted by a layoff, you are probably reeling and wondering when it will end. That is the million-dollar question on everyone’s mind. I’ve worked through a number of recessions but there were two big ones I remember: the .com bust and the 08-09 housing market crash. While I don’t have a crystal ball and really no one knows for certain if we have reached the bottom, I do believe that there are some parallels that we can draw between 2000, 2008-2009 and now.
But first…
If you or your family have been personally impacted by a layoff, what I talk about next is not intended to dimension your experience or the hardship that you may be going through. I, myself, was laid off in Nov. of 2022 and while I had spent a number of years cleaning up my own financial messiness and building a pretty strong cushion for myself, I know that not everyone is in that same boat and that, even with that cushion, I began to feel a little hopeless myself at one point. Most of us are working to finance our lives and being laid off can spark alot of fear, frustration, anxiety and stress. I get it. I’m hopeful that the information I share next will help you create the space needed to become at least a little hopeful. If it doesn’t, remember you are not alone. There are people who love and support you. Reach out when you need help.
Looking at the Macro Economics
There are micro and macroeconomic cycles we see as a nation and as a globe. I’m no economist by any stretch of the imagination but allow me to try and share what I’ve learned so that together we can understand the cycle.
What is a recession anyway? Investopedia describes a recession as “a significant, pervasive, and persistent decline in economic activity.” Economists use historical information to predict what might cause a recession in the future. Sometimes they get it right. Other times, not so much.
First, we typically experience a recession every 3-4 years. We actually had a brief one at the beginning of the pandemic. At the time I was working for a large, national bank that was convinced that the pandemic would drop not only the US but the world into a depression (or in other words something significantly worse than just a recession). Was this an overblown, conservative view? In hindsight, yes but you have to remember it had been more than 100 years since we shut down the world economy (hello the Spanish Flu of 1918) but technology, thankfully, has advanced light years during that time. Those advancements enabled many workers to do their jobs while sheltering in place, not to mention the medical advancements that helped treat patients and enabled a vaccine for COVID-19. The bank I worked for wasn’t alone in their thinking. As a result, The Dow Jones had a 3000-point drop on March 16, 2020, which is the largest single-day drop in US history. Panic and pessimism were at their peak. And then… the panic subsided and made way for a new normal and most of us don’t really think of 2020 as a “recession”.
Other recessions, like the one that was brought on from the .com bubble bursting or the housing market collapse, have a more prolonged impact on our economy. I recall waves upon waves of layoffs during both of these recessions. People were scared. Spending stopped. Recovery felt like it was never going to come. During the .com bust companies were wiped out in a single day (and, I questioned my choice to be in tech if I’m honest) and during the housing collapse I was at a company that went through 4 rounds of layoffs months apart trying to figure out how to weather the storm.
After the .com bust and the housing crisis, the unemployment rate was ~5% and ~9% respectively. At the start of COVID-19, it was ~14%. Today it sits at ~3.5%. These numbers are little solace if you have been laid off and looking for a while I know. But let’s look at the data for a second without emotion. It could definitely be worse.
Tech is taking a beating
Arguably, technology workers and thought workers are being hit hard this time. But why? My personal take is this: Technology was needed to weather the storm of the pandemic and asking everyone to shelter in place. Technology companies that could enable people to work remotely saw boon times where sales came easily and there was money to be made. To keep up with the demand, rapid growth in hiring had to occur. If I’m honest, I think alot of tech companies got a little greedy and lazy and over-hired in the short term. What goes up, must come down. Those executives that were over-hiring should have known that sheltering in place would come to an end at some point. That COVID-19 would either be eradicated or become an endemic like the flu that just becomes an acceptable part of life, which it has. Inevitably, tech has to resize organizations to meet the demands of business, which aren’t what they were during the pandemic; hence: layoffs.
Take heart!
Will there be additional layoffs? Probably. Has the worst past? Unless there are additional economic pressures put on companies that we do not yet know about, I believe the worst of it is probably behind us. I saw similar patterns in 2000 and 2008-2009. Heavy cuts with hiring freezes happen first, rip the bandaid off so to speak, followed by a period of stabilization. Growth is what comes next. I’m seeing more people posting about jobs they have accepted than I am about those being impacted by layoffs. Recruiters and leaders are starting to do more outreach to candidates for roles that are open or about to become open in the near future. It seems that we may be rounding the corner on this one.
Will you be landing your dream job at your dream company with all of the cozy perks you had before? Maybe but probably not. Will you be unemployed indefinitely? Not unless you choose to.
Some tips to help you navigate what comes next if you have been laid off:
Necessity is the mother of invention. Mark my words: new companies will be born from people losing their jobs and deciding that they would rather go out on their own than wait for another company to make them an offer. Might you be one of them?
All of us have skills that are transferable to other positions and industries; especially in tech where every company needs technology to run. Make a list of your skills and think through what other types of roles might need what you know how to do.
Explore other industries. I know. This one sounds like ugh. But perhaps the industry you will love and thrive in next has nothing to do with the one you have been in. My rule of thumb (all the time not just during downturns) is if I get a reach out about a role at a comparable level, I have the conversation. Many of the conversations I’ve had as of late have me thinking… Maybe the next move is outside of tech.
When you are knee-deep in the stress of how are you going to weather the storm, you need an anchor to help you find the horizon. I can help. Let’s talk.