My former colleague Dave Vellante has written a nice comparison of the current tech contraction with the dot-com-bust of 2000. He makes interesting points about several factors, such as the roles played by Netscape and OpenAI as innovators and Nvidia and Cisco as major players, the stock market bubbles, and risks and rewards along the way. However, he is missing one critical element: the population of tech workers has been shrinking and the pace of the layoffs is increasing. And the way people were laid off now and then has some big differences.
Granted, back in 1999-2000 there were fewer overall tech workers, (as an example, Microsoft went from around 40k in its 2000 staff to 200k today, Amazon grew from a few thousand to >1M) and many of the tech companies were small, in some cases very small. The big difference then and now was the pace of the layoffs. Back then, they happened quickly. But now tech co’s have been laying off workers since the pandemic, but in big numbers by comparison.
In the past few years there have been several rounds of layoffs at Spotify, ByteDance, Amazon, Twillio, LinkedIn, SecureWorks, Microsoft, Meta, and Twitter which added tens of thousands to the unemployment lines. And sure, there are plenty of startups that even got their series A’s that went under in the past couple of years — that is to be expected. But the contemporary situations are from established companies that are having their first serious contractions.
Will some of these folks start their own companies? Sure. But tens of thousands? Not so sure.
But part of the problem — perhaps most of the problem, apart from the lowering business demand in the tech sector — is the way we all are returning to work in the spaces previously known as our offices. Back when we were in the midst of the pandemic, remote work took on new relevance and meaning, and caught on quickly around the world in many different ways, some good and some bad. Take Slack for example: they went 100% to remote work back in 2020. Other tech companies were less enthusiastic, such as Google. And what I have seen is these less enthusiastic companies were some of the first to revoke home-working policies and mandate people to return to one of their offices.
Early on in the pandemic, I put together this pod with my partner Paul Gillin about some things to consider for the newly minted home worker. Those were more practical suggestions on what equipment to purchase and how to best secure your home. For a somewhat different treatment, I wrote this blog for Avast on how to craft equitable policies to encourage and evaluate home workers. Those pieces seem rather quaint now, and they assumed that once all this remote stuff was unleashed, we would stay that way.
That is not the case anymore. Four years later, many tech workers are told to return to their offices. And the changes are confusing as companies try to adjust and populate their expensive downtown real estate. This makes no sense to me, and the latest dictums from Dell (for example) are guaranteed to have them lose more people, which could be the hidden reason for them. It is almost that we forgot the productivity gains during Covid when people worked from home. Or companies were eager to see their workforce sitting in those awful bullpens where everyone was on headsets.
The return to the office says one thing about tech: they have done a lousy job at developing middle managers, who are insecure about handling underlings that they can’t see or be physically nearby. It really is a shame: all this remote access tooling that has been developed over the decades, and the one group of companies that you would think would figure this out are the first in line to recall their staffs.
Also gone from today’s tech offices are some of the lavish benefits that were put in place to attract talent. Anyone getting free massages, catered meals and taking yoga classes these days? It would be an interesting cohort for some research project.
Finally, there is my own cohort — tech journalists, who are being laid off once again in this latest cycle. The difference between now and 20-some years ago was we had printed magazines that were supported by millions in ad revenues to pay the way. Then the web wiped out that business model and giants such as PC Week and Infoworld went scrambling. Some of the large tech-oriented websites such as Vice have shut down, and I am sure more will follow.
Yes, AI is exciting, and there is a lot of work being done — even by humans — in the field. But it requires real capital and real brainpower, and not just sock puppets and a cute dot com name. Or at least, I hope so. And building a trust with your remote employees: the best ones will eventually migrate to companies with more liberal remote policies.
Thanks for this post. I think you’re being a bit harsh on employers who are calling employees back to work. There are employees and managers that can work well remotely and those who do better in a typical office environment.
Forcing “middle managers” who prefer to interact with their team in person (or to support their team remotely) is probably not the right step. Companies who were built from the ground up to work remotely or in person need to recognize their roots and be very careful and intentional as they make changes so that *all* team members (including managers) can continue to contribute effectively and efficiently.
45% of women workers left their jobs during the pandemic and many still haven’t returned vs 14% of men. Why? Because they’re primary caregivers – to children and to their own parents. That said, women as well as people of color and the LGBTQ+ community benefited through remote work — often because they didn’t have to tangle with the all-white-male office denizens. Companies may lose more workers because of back-to-the-office policies, but they’ll lose more because (1) the infant population is growing (again) and (2) if they don’t do something to support it, workers will go elsewhere. Currently (ironically) many more male-dominated industries (motor vehicle) offer maternity leave than female-dominated industries (healthcare). There are still many more job openings than there are workers. The issue is — with or without AI/new technologies — the US will step up to take care of the children the current pro-life/Christian government says are so important. Or it will continue to ignore the problem. Sorry to sound harsh here, but remote vs back-to-office has more complexity than most people want to consider… especially CEOs who need to pay rent for empty building space or simply want to keep an eye on their employees.
Where can I start?
American business in general, not just tech, does an awful job of selecting, training and mentoring people for management roles. Often the person promoted wants “only” to be an individual contributor. Sometimes the newly promoted manager, lacking training turns out to be a tyrant with his “underlings”, as he/she would call them.
I do tech journalism as a sideline of my real work, the care and feeding of mostly computers around here. And my writings reflect many of my day-to-day experiences. There is no way in the world that I could produce at a fast enough rate to write enough articles as my sole source of income, even if I lower my own quality standards. Thank you for pointing in the direction of AskWoody. It’s a good fit for my nuts-and-bolts approach to hardware, software and systems engineering, which is what I really do here.