Big Tech Is Laying Off Workers: Is Your Job Next?

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For most of the FIRE movement’s existence, the single largest career type that made up the movement was engineers: specifically, software engineers.

The reason for this is that the modern FIRE movement’s explosion in popularity happened to coincide with a similar explosion of growth in the tech sector. From early 2000 to now, the world went from a personal computer being a 20 pound box of metal sitting on a desk to something so small and portable that we can fit it in our pocket. We also went from a typical US household owning a single computer to our current environment of multiple devices per person.

That transition takes an army of highly skilled workers, and the tech sector boomed. Salaries ballooned along with it, and perk-filled job offers promising stock options and bonuses became common. A lot of nerds starting making a lot of money.

Along the way, a small subset of those nerds thought “Hey, maybe I should save my money and invest it instead of blowing it all,” and the modern FIRE movement was born. Mr. Money Mustache was a software engineer. Both FIRECracker and I were too, as was Jeremy from GoCurryCracker. Software/computer engineering became the single most reliable and reproducible path to FIRE for the past 20 years.

Unfortunately, those days may be coming to an end.

Software engineers were the most overrepresented position in layoffs in 2023, relative to their employment, according to data requested by Vox from workforce data company Revelio Labs.

Tech companies are finally firing tech workers,

How did we get here?

During the pandemic, the tech sector was absolutely booming. Job offers were flying left and right, salaries were going through the roof, and it was common to have multiple offers from multiple companies, and the reason was obvious. We were all stuck inside watching Netflix, playing with our phones, and ordering crap off Amazon.

Well, what goes up has to come down. It looks like the tech companies over-hired, thinking demand was going to continue to hockey-stick up and to the right forever, and are now consolidating their gains and shifting to a more sustainable growth pattern.

Another big reason was this guy:

Photo by Steve Jurvetson @ Flickr

Elon Musk famously took control of Twitter back in late 2022, then proceeded to lay off 80% of the workers there. Not only did the sky not fall, Twitter went from operating at a massive loss to projecting positive cash flow by Q3 2023.

This also gave political cover for other tech CEO’s like Mark Zuckerberg to embark on their own “Year of Efficiency.” Laying off 10%-20% of the company seems a lot more palatable when you can point at someone else and say “At least we’re not as bad as that guy.”

In return, investors have rewarded these efforts handsomely. After Meta announced a further planned headcount reduction of 10,000 workers, Wall Street cheered, sending Meta’s stock price up an eye-popping 91% so far this year alone. Because they’re getting richer the more people they fire, there’s very little incentive for these tech CEO’s to slow down anytime soon.

And finally, the big AI-powered elephant in the room: ChatGPT.

Just a few years ago, the idea of software writing software would have seemed ludicrous, but nowadays the technology has become advanced enough that it might be happening already.

Business Insider reports that software engineers are in a panic about the prospect of their jobs being replaced.

“Software engineering is a dying profession,” a Microsoft engineer wrote in a Blind post from earlier this week, titled “Face it, golden age is over.”

Software engineers are panicking about being replaced by AI, Business Insider

While I’m deeply skeptical of the idea that a tech illiterate pointy-haired manager can simply direct ChatGPT to “write me a million-dollar app, AI bot!” I do see AI being used to help software engineers be more productive, effectively acting as a super-powered code assistant. However, that does mean that companies will require less human bodies to achieve the same level of productivity.

Put it all together and the narrative that the ability to code will always guarantee employment is appearing to be no longer true.

Your Job Is Never Safe

The current bout of job instability in the tech sector is unusual in its intensity, but it’s not new. When FIRECracker was working, her job was constantly under threat of being outsourced to India. At one point, her co-workers were being informed their job was disappearing, and then asked to train their replacements before they were formally fired. And in the 2000’s, the dot-com crash caused by insane overvaluations of tech companies turned Silicon Valley into a ghost town overnight.

None of us can afford to feel comfortable with our jobs.

FIRECracker and I are constantly amazed by how easily people enter into insane amounts of mortgage debt that require you to continue working for the next 25 years. I mean sure, your boss might be patting you on the back and telling you that you’re indispensable now, but who knows what tomorrow might bring? All it takes is a change of company ownership, the emergence of a new technology, or a geopolitical event beyond your control and the ground will shift under your feet. It’s happened before and will happen again.

The only strategy that has been proven correct time and time again has been:

  1. Control your spending
  2. Build up your net worth
  3. Build a passive income

People forget that the “Retire Early” part of FIRE is completely optional. If you like your job and it’s still available to you, by all means feel free to keep working. But don’t use liking your job as an excuse to never get your financial house in order.

When FIRECracker and I were shopping for a house back in 2010, the idea of a mortgage scared the crap out of me. My plan (at the time) was to use all the pre-payment options to pay down the mortgage as quickly as possible so I could get rid of the damned thing within 5 years, and when I explained my plan to my co-workers, they laughed at me. “Why would you pay more into your mortgage than you absolutely had to?”

This is why. If I was one of these employees at seemingly invincible companies like Google or Meta facing the axe and I still had a mortgage, I’d be shitting a brick right now. Yet that’s exactly the situation thousands of tech workers are finding themselves right now, like this guy…

Being financially independent is the only way to ensure that a sudden job loss can’t destroy your life. It’s not normal to have a mortgage, and your job is never safe. The sooner everyone realizes this and starts to plan accordingly, the better off we’ll all be.

What do you think? Do you think your job is safe? Or are the recent layoffs worrying to you? Let’s hear it in the comments below!

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26 thoughts on “Big Tech Is Laying Off Workers: Is Your Job Next?”

  1. I’ve been cruising along at the same place for sixteen years, under what’s now our fifth set of corporate overlords, making zero waves and a sufficiently meager salary that the C-suite folks don’t look at me twice when pondering whose heads go on the chopping block. Last year I watched them axe some longtime software engineer coworkers who made twice what I do and have young kids. 🙁

    If push came to shove we could probably pay off our mortgage in eighteen months rather than by the Sept 2030 end of term, but that 2.65% rate is too good to accelerate unless we absolutely must… and we don’t like the idea of wiping out our emergency fund to eat tofu six days a week.

  2. And of course, those of us with a lot of stock holdings are benefiting from the increase in stock prices due to the mass layoffs.
    A friend tried to do the “right thing” and bought 2 condos over the last 15 years. Lost 100K on one of them, much more including costs.
    And is stuck underwater with another in a decreasing real estate market in Edmonton, with tenants but just breaking even. (losing money)
    If you make mistakes with mortgages it can basically wipe you off the table.

  3. Great advice. Save early and often, borrow as little as possible for as short a time as you can, build your net-worth and become financially independent. When you have money you have options.

  4. Excellent post.

    Pithy and concise yet manages to highlight all the main issues in this brave new AI world we are all facing.

    If you had children, what would you be telling them to be study in school?

  5. Never design your finances around the good times never ending. Because just when you think you’ve got it made, you don’t. Things happen. Shit gets old etc. layoffs, market crashes, illness. Not saying we need to live in fear and tier no risk but be conservative with the lifestyles.

  6. Just a random thought, just reread the Quit book the other day.
    I grew up totally deprived, a bad situation.
    Then did not have much coin most of my life due to working in the arts, etc.

    But have been working on FI for about 5 years, investing about 80% of income, now I make more in Div/Interest than I used to earn working. Just got a wack of payments this morning into my accounts.
    But still am working at work I enjoy in the arts, and am making more than ever.
    So have reached a lean FI, which is a nice feeling to know am basically set for life. That helps with the unconscious feeling of growing up with less than nothing.
    Its nice, its not a miracle, its just a certain feeling of calm.
    Now just have to worry about Being and Nothingness.

    1. Laughed out loud. FI and existentialism. Not distracted by worrying about money which gives you spare time to think about the meaning of life.

  7. hmm, just re-ran all my numbers through a conventional retirement calculator based on retiring now, and it said.

    You will be able to fund 100 plus years in retirement.

  8. Wayyyy back in the 90’s when EDA software was starting to proliferate, greedy managers started thinking that they could train low level production workers on the software and then sh*t-can the engineers. The exact opposite happened. Demand for engineers went way up, and production work got outsourced. I thinking it’s gonna be a similar situation for software engineers.

    I’m guessing that these layoffs really are part of a vast over-hiring that took place over the last couple years and that it will even out over the next decade. I see ChatGPT type AI morphing into a sort of StackOverflow on steroids. Over time, the need for software engineers will steadily increase, that is until AI really does achieve the singularity.

  9. Almost three decades ago I was on a project where the Project Manager had to go before the US Congress EVERY MONTH to justify why our project should not be cancelled. Talk about job insecurity! Although the size of our mortgage payment on our primary residence made me a bit nervous at the time (by today’s standards “only” a “quaint” $1,800 USD per month), my significant other worked in a completely different industry, so their job was a bit more secure. Besides, if I lost my job, couldn’t find another, and we ended up losing the house, I had a “Plan B”: live in my parent’s RV in their backyard. LOL

    Thankfully, it never came to the point of having to implement that “Plan B,” and I went on to work many different iterations and follow-on contracts related to that original project over the course of my software engineering career.

    All this to say: no one’s job is ever secure. Those days (if they ever existed) are long gone. Live BELOW your means so you can save up for a rainy day. Be ready with your viable “Plan B” for whenever that rainy day comes.

  10. I read in the Wall Street Journal (humble brag, heh heh) that the mass overhiring was to keep those “quality” employees away from their competitors. I mean, how can Twitter run on 20% of its workforce? Plus in another WSJ article, there were many hires who basically did nothing for years for 6 figure salaries. What a world, huh?

  11. No sign of things slowing down as far as hiring goes in my industry. I’m getting approached for work as much or more than I have been. The people I know that went to Amazon and Meta in the last few years still have their jobs and don’t seem too worried. In my experience, it takes a high level of critical thinking skills to use LLMs to accelerate productivity and not everyone has that. Things could change, but at the moment, I think the doom and gloom is overstated. We’ll see what happens.

    Love your work. Keep it up!

  12. When it comes to job security, my parents were able to stay with the same company throughout their entire career, whereas I have changed jobs every 3-4 years on average. I have noticed that the next generation is even more demanding and tends to switch jobs if they don’t get a promotion within a year. This leads me to believe that the relationship between employees and their managers will be quite different, regardless of their job skills.

    As for AI, it has already disrupted many industries and is sure to continue doing so in the future. Many businesses are being built using AI, and I believe that this is just the beginning. Despite this, I think that software engineers will continue to play a dominant role in the industry. Their job responsibilities will evolve from writing HTML and JavaScript to building frameworks and feeding AI APIs to create even more innovative products and services.

  13. I’d be interested in your take on this as well. My daughter is nearing HS age and it’d be great to give her actually helpful advise on careers before the colleges and their useless degrees come calling.

    1. Might be wise to do a pure mathematics degree, or physics, etc for undergrad. I think math and sciences are still going to be a good direction and you can always specialize at masters level if you have to. I also think medicine is a safe bet, either doctor or nurse. Can’t ever seem to find enough of them around and we all get old and die.

      1. Please do not tell your child to do a science degree. My son and step-daughter both graduated with science degrees in the last few years, worked hard, got good grades… and ended up with job offers at barely above minimum wage here in BC. My son got accepted into masters program in chemistry (with a research position in a solar tech lab) and, fingers crossed, he’ll at least get a living wage at the end of that. My daughter took the low-paying environmental lab position and, after 5 years, is now at least able to pay her bills. Please do that engineering, computer science or a business degree! Or just get a medical tech diploma and make decent money in 2 years instead of 7 years!

  14. Here’s a hypothetical. Man has a great job. Man wants house for his family a beautiful new home backing and fronting green belt areas in 2021. Man CAN afford mortgage using safe housing affordability guidelines but opts to save as a renter. Man takes money $600k that was earmarked for half the house value as a down payment and gives it to Mr. Market Nasdaq heavy stock QQQ ETF. Housing goes up 30% and QQQ drops 30% in 2022. He would have $1.6 m house up from $1.2 m in 2023, but instead now has $400k for a down payment on a home he can no longer afford because of rising values and did I MENTION THAT 3% mortgage is now 7% and his landlord just raised rent 20%. Moral of the story is there is always risk in life just never stop living and taking some risk. Things just may work out amazing! He should have bought the house instead of being fearful and overly frugal.

  15. This is why more people should consider a trade. I am an industrial electrician with the IBEW and although I only worked 8 months last year, I grossed $170k.

    There is a ton of work out there for those willing to travel, and it’s nice having the peace of mind that my job will never be outsourced. In fact, like many industries there are a large number of workers retiring and not enough quality candidates to fill their shoes (or boots, in this case).

    Combine that with the freedom to travel anytime I please. I can quit or request a layoff without the fear of not being hired at a later date. I haven’t reached my FIRE number yet, but I have zero debt and can take advantage of geo arbitrage opportunities like spending winter months in Asia, where my money goes a lot further.

  16. Give yourself the competitive edge you need to excel in the CCP Exam 2023’s Credit Management paper with Learning Sessions’ comprehensive study material, thoughtfully created to meet the latest IIBF syllabus requirements.

  17. looking at retirement soon in 60’s.

    Have nephew who will graduate to work for Amazon in CAnada. His brother has a job with Meta in California for only last 2 yrs.

    We’ll see about them. They are young and hope will not be discouraged. Yes, some of their friends have been laid off.

  18. Big Tech companies’ layoffs have raised concerns about job security amid rapid digital transformation. Automation and AI have brought benefits but also displaced workers, affecting both low-skilled and highly skilled professionals. Companies are restructuring to stay competitive in this changing landscape.

    However, not all jobs are at risk. New roles requiring human creativity and critical thinking emerge as technology evolves. Companies invest in upskilling programs to help employees adapt and remain relevant.

    Workers should embrace lifelong learning and develop skills that complement automation, like problem-solving and collaboration, to increase job security.

    Governments play a crucial role in shaping the job market, establishing supportive frameworks, social safety nets, and promoting entrepreneurship.

    While the fear of job loss is valid, it’s not a doomsday scenario. Embracing change, acquiring new skills, and advocating for supportive policies can help individuals secure their professional future in the digital age.

  19. On a positive note GICs have ranging between 4 to 5 % this year. 🙂

  20. Nice! I’ve been searching for a reliable digital transformation partner, and Lotus Labs has caught my attention. Has anyone had the opportunity to collaborate with them? I’m keen to learn about their capabilities in driving digital transformation and the satisfaction of their clients. They seem to offer a comprehensive range of services, but I value your insights and experiences. Any feedback or recommendations would be highly valued!

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