According to data compiled by “Layoffs.fyi”, 494 tech firms have laid off 138,820 people this year. [1] The list of companies includes many tech giants including Amazon, Meta, Microsoft, Google, IBM, SAP, and Salesforce. As a result of the increasing number of mass layoff headlines, workers are understandably concerned about their income and an upcoming recession.
Since an increase in layoffs is an indicator of a looming recession, they may be right; However, a big indicator of a slowdown is a reduction in hiring, which is not happening.
The companies which were in the above-mentioned list either invested a big amount somewhere or started recruiting for various more customized positions [2].
Then, what is the reason behind all these mass lay-offs?
Not One But There Are Many
The main reason for these layoffs is that tech companies went on a hiring binge during the pandemic as lockdowns sparked a tech buying spree to support remote work and an increase in e-commerce, and they are now facing revenue declines.
What can Tech Workers do to Prepare for a Recession and Potential Layoffs?
Before you start preparing, you must ask: “Are we in a recession, or are we on the verge of a recession in 2023?”
ADP chief economist Nela Richardson says, “We are not in a recession yet,” and we may not realize it until it ends.
So, if a recession and layoffs are on the horizon, can we do anything to mitigate the damage?
Yes, there are several steps tech workers can take to prepare for this potential situation. A few of them are listed below:
Take Care of Yourself First
ZipRecruiter chief economist Julia Pollack says, “The loud layoffs in tech have a disproportionate chilling effect because they’re happening at household name companies that have just experienced rapid growth.”
Big names and regular headlines are troubling workers and their mental health. That’s exactly what is happening nowadays, and the uncertainty of a recession or its fear can take a toll on your mental health.
That’s why staying mentally, physically, and emotionally healthy is important. If you stay fit and healthy, you can care for your loved ones better and reduce the impact to a minimum. Take time for yourself, practice self-care, and seek help when needed.
Prioritize Savings
Saving is always beneficial, but it is especially important during economic uncertainty, such as a recession or the possibility of layoffs. Having a financial cushion, you can feel more secure and less worried about unexpected expenses or job loss.
During a recession, savings can be especially beneficial as an emergency fund to avoid debt and explore investment opportunities. So, try putting at least 10-15% of your income into an emergency fund.
It can provide a financial safety net during difficult times, and it is always a good idea to make saving a habit to prepare for the unexpected.
Build Your Network
Having a strong network of colleagues and contacts can be very helpful in an upcoming recession or the possibility of layoffs because it may provide access to job openings, potential employers, and valuable information about the job market, which can be critical during a tough economy.
Keeping in touch with former colleagues and managers, attending networking events, and building relationships with professionals in related industries can help establish a strong network that can provide support and job leads during difficult times.
In this way, a strong professional network can serve as a safety net that offers a range of options and opportunities when traditional job markets may be tightening.
Consider Alternatives
Considering alternatives is crucial to mitigate the impact of an upcoming recession or the possibility of layoffs. One way to do this is by diversifying your skills and exploring new career options. If layoffs are inevitable, look into alternative career paths.
It could involve obtaining additional certifications or degrees to increase your marketability in a changing job market.
Consider freelancing or consulting or starting a side business in a related field. You can also work on some ideas buried in the grave of your “diary of dreams and plannings” for years. Everyone has such a diary, right?
Update Your Tech Skills
The tech industry constantly evolves, and staying updated on the latest technologies is vital to our growth. But it becomes vital when anticipating an upcoming recession or possible layoffs.
Learning new technical skills increases our employability, helps us stay relevant, and shows a willingness to adapt to changing circumstances, making us valuable asset to any organization. It can help us prepare for unexpected economic conditions and navigate through challenging times.
To update your tech skillset, consider taking courses or earning certifications that will help you stay ahead of the curve.
Negotiate Your Contract
Negotiating a contract during an impending recession can help ensure that employees are protected and that some benefits and protections are in place in the event of job loss or financial hardship.
Remote work arrangements can also be negotiated to save money and prepare for future layoffs or recessions.
Contract negotiation can help provide job security, a steady income, a valuable benefits package and negotiate annual raises or bonuses. Therefore, if your current employer is willing to renegotiate your contract, take this opportunity to negotiate for more flexible terms.
Improve Work Ethics
As stated in a Harvard Business Review article, 50% of the world consists of C players, 40% B players, and 10% A players. C players do the bare minimum, don’t have good work ethics, and are not good communicators or critical thinkers. In most cases, it is found that employees from these groups remain on the edge of job loss.
B players are good role players but not driven to constant growth and improvement. Players add 80% of the total value to the world, carrying the dead weight for all of the C players and a lot of the B players.
Maintaining good work ethics at the office can help tech workers ensure that they are seen as dependable and reliable employees. It means coming in to work on time or 10 minutes early daily, meeting deadlines consistently, and going above and beyond the call of duty to foster inter and intra-departmental communication for streamlined efficiency.
By doing so, tech workers can demonstrate to their employers that they are a valuable asset and can help them weather the storm of a recession and layoffs. Furthermore, good work ethics can help tech workers expand their network and build relationships with other professionals in their field, leading to future job opportunities even during a recession or layoffs.
Relax and Prepare Wisely
Regular negative news of massive layoffs must be worrying you, which is ok. But there are ways we can mitigate the impact. By following the ways mentioned above, tech workers can better prepare for the potential impacts of the 2023 recession and be better positioned to handle any hardships that come their way.
Also, dark clouds in the skies are not forever; this too shall pass for the sun to arise. According to the recently published article in Computer World, global IT spending is estimated to increase in 2023, which will surely increase the recruitment rate. As Richardson says, we may not know a recession until it’s over. So, ultimately, being proactive and open to new opportunities and possibilities is key to mitigating the effects of an upcoming recession or potential layoffs. So train hard and prepare wisely!
Reference Links:
- https://layoffs.fyi/
- https://hbr.org/2003/06/lets-hear-it-for-b-players
- https://www.computerworld.com/article/3685791/enterprise-software-services-sales-to-boost-2023-it-spending-by-2-3-gartner.html
- https://www.cnbc.com/2023/01/23/microsoft-announces-multibillion-dollar-investment-in-chatgpt-maker-openai.html
- https://www.computerworld.com/article/3685936/tech-layoffs-in-2023-a-timeline.html
- https://www.cnbc.com/2023/01/31/mass-tech-layoffs-dont-signal-a-recession-but-manufacturing-jobs-could.html
