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2016 Has Been an Ugly Year For Tech Layoffs, and It's Going To Get Worse, Says Analyst (ieee.org)
IEEE Spectrum writer Tekla Perry writes: Early this year, analyst Trip Chowdhry from Global Equities Research predicted that the tech world was going to see big layoffs in 2016 -- some 330,000 in all at major tech companies. At the time, these numbers seemed way over the top. Then IBM started slashing jobs in March -- and continued to wield the ax over and over as the year progressed. Yahoo began layoffs of some 15 percent of its employees in February. Intel announced in April that it would lay off 12,000 this year. So, was Chowdhry right? "Yes," he told me when I asked him this week. "The layoffs I predicted have been occurring." And worse, he says, these laid-off workers are never again going to find tech jobs: "They will always remain unemployed," at least in tech, he said. "Their skills will be obsolete." Some of these layoffs are due to a sea change in the industry, as it transforms to the world of mobile and cloud. But some are signs of a bubble about to pop. It's all going to get worse in 2017, he predicts, because that's when the tech bubble will burst. Chowdhry, someone who has never been reluctant to go out on a limb, is predicting that'll happen in March.
The tech bubble has popped before, and it will pop again. That is just the natural respiration of our economy.
I am sure many of the laid-off workers can update their skillsets and find new jobs. Or some can go ahead and retire. The remaining ones can find accept a non-tech job at lower pay or unemployment.
And life will go on for everyone.
Yet 'we can not find anyone'
Most of the layoffs you are seeing are not material but cost cutting. Meaning the job just went to someone 10x cheaper. Companies will again learn 'you get what you pay for'.
But, to imply that they'll be obsolete is disingenuous.
Tell that to the recruiters and hiring managers. I was out of work for two years (2009-10), where hiring managers told me I was overqualified for minimum wage jobs and recruiters told me I was unemployable for everything else. When the number applicants per job opening dropped from seven in 2009 to three in 2011 (full employment is two), I got hired for a full time job the day after my Chapter Seven bankruptcy got finalized.
Traditional IT roles are not being automated out of existence. For one, any company providing a "cloud" need server guys, network guys, hardware techs, and so on. Two, many small/midsize businesses don't have the cash flow to support what cloud providers are charging and prefer to keep infrastructure as a capital expense. Over the decades I've noticed that IT changes, but never goes away.
". . . . . or to find a position at a smaller firm that needs their skills, probably for less money."
I am living this reality right now. It's challenging because the clients are in companies that have short-handed staffs, outdated environments and DR plans that are years out of date and/or never tested. If they ever had one at all. They don't really want the new shiny stuff. They want to make the old stuff last and last. And run the newest software, even on the older platforms. 'Not supported on Windows 7? That is YOUR problem, not mine. Make it work.'
Where it runs is irrelevant. You still need architects and user support. You still need migration consultants. And you still need custom code written...
Indeed, and all of those positions rule out a huge percentage of IT workers. If you cannot code, interface with humans, or are not an SME, then you're out of the game. IT workers with the initiative to evolve their skills into devops survive. I personally want to thank AWS for making the EC2 API so convoluted that it is too challenging for normal humans to operate.
If there's a war on citizens wrt tech employment, then remove the means to exclude citizens.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
The main change is that medium sized organizations no longer have a group of mission critical people. Now these mid sized organizations hire a faceless cloud provider who in turn hires the people. None of these people are "mission critical" but they are geographically concentrated. This hurts towns without a major IT organization to sop up the extra IT people being released from mid sized organizations.
Ultimately it is clear to me there is a shortage of good IT talent. My wife, who has no formal IT training, does more IT work than me (I have formal IT training) because those are the highest paying jobs that are available for any generic degree in my city. Companies are trying to outsource but then you end up hiring people to manage the outsourced people. It may be a cost savings but the end result is still the same: massive IT employment in the US.
Until generic degree holders (liberal arts, C/B grade business students, C grade STEM, drop outs, etc.) stop flocking to IT jobs because pay is higher than any other generic job I will believe we have an excess. Until that day I will continue to assume that layoffs might be happening but there is still a overall shortage of "IT" talent.
Early this year, analyst Trip Chowdhry from Global Equities Research predicted that the tech world was going to see big layoffs in 2016 -- some 330,000 in all at major tech companies... So, was Chowdhry right? "Yes," he told me when I asked him this week. "The layoffs I predicted have been occurring."
I call bullshit on this guy. There's a table of predicted versus actual layoffs in the article. Of the 14 companies he made predictions about, only four of them seem to have any actual layoffs, and the actual numbers are generally a fraction of the predicted number. Layoffs for companies that he didn't even make predictions about are given, in an apparent effort to buff his credibility, but some of those companies are not exactly household names (WTF is "Zenefits"?), and as for the rest, their predicted layoffs are in the 5-to-10 percent range.
Not that further layoffs are necessarily unlikely, especially with this presidential election coming up. But it's already October, and it's been nowhere near as bad as this clown predicted. You don't get to say you were right when the data proves you wrong. You don't get credit for predicting layoffs in 2016 if they happen in 2017. You don't get to just make a blanket prediction like "layoffs will happen in the future" and get points when they eventually happen.
Competency is only a small factor in hiring. It's an economic decision by the hiring company. It's a political/subjective decision by the hiring manager/HR as well as the ongoing hunt for the purple squirrel. Like many "seasoned" IT people, I've gotten tremendous feedback from a variety of sources that I'm damned competent but, because I wasn't under 35, had a life, knew how to say no I wasn't considered to be "good employee material". The perception that layoffs only get rid of deadwood from a company is a fallacy. Layoffs are random good and bad people are laid off and simply discriminating against someone because they've been laid off is shortsighted but isn't likely to change.
My company laid off 5000 last year. The sole reason given was the rising cost of benefits. They then turned around and hired 3000 in India. If you like your healthcare....maybe you can keep your health care, but you don't get to keep your job.
Ok time to stop H1B's! as clearly they are not needed when USC's are being layed off.
Clearly not when you couldn't get a job for two years until anyone else competent was hired first.
Seriously, "never ever going to work in tech", give me a break.
The point of a college degree is to teach you how to learn, and to have basic skills in a field.
You don't get rid of MDs just because they aren't "up to the latest tech", they take a few CMEs and go do a slightly different version of being a doctor.
Same with Nurses.
Same with Biologists.
Same with Computer Scientists.
The problem is the employers being too lazy to train people, and using it as an excuse to outsource.
-- Tigger warning: This post may contain tiggers! --
This is why I decided to be a network engineer. You can outsource everything, but if your network is down, what are you going to do?
Sure, I could probably make more as a developer, but meh, I'm happy with my current salary.
The fact that someone sees a transformation to "mobile and the cloud" as a significant change in the skills required, makes me wonder just WTF skills these workers really had, even in their old jobs. Programming is programming.
It's true that sometimes a different environment has different constraints (e.g. I have more RAM on a phone than I have inside the Apache process on a much bigger server) but it's not really all that big a deal to adjust for, is it? So you're taking different approaches to caching -- you might have to unlearn some habits and learn some new ones (suddenly, CPU is expensive and RAM is cheap -- or vice versa).
How are skills being obsoleted? I don't get it. The more tech advances I see, the more I'm convinced that hardly anything is ever really changing much at all.
without overpaying the market like crazy
Interesting comment. What does 'overpaying' the market mean? If there are no people, and you need people, you need to pay what it takes to get them there. You seem to be insinuating that there is some limit to pay below what it takes to get people there, but that signifies an unfair employment market right there.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
People have no idea how much of their business is at risk when it is in the cloud. Cloud works for BIG Corps, not your average Small business. The problem is, that a Big Corp has the resources to build out its own tailor made "Cloud" infrastructure, and doesn't need the cost of Azure or whatever.Unless you need the scaling on demand that the Cloud Offers, then you're likely not going to see a benefit cost wise.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
I find it interesting that there is a critical shortage of STEM workers coinciding with a tech bubble. If that's true, what's the point of encouraging STEM paths in college? Those jobs won't be there anymore if/when the bubble bursts.