Snapchat, big tech layoffs making you anxious about your job? Don't panic. What to know.
The labor market is booming. Although the unemployment rate ticked up to 3.7% last month, it’s still hovering at a 50-year low. What’s more: There are about two job openings for every unemployed person.
But not every sector is immune to layoffs.
More than 41,000 tech workers have been laid off since the beginning of this year, according to a Crunchbase analysis. Included in that tally: Snapchat, which recently announced it was laying off 20% of its workforce, or more than 1,200 employees; and Robinhood, which laid off about 1,000 employees or 30% of its workforce.
These may not be isolated incidents, as half of U.S. firms are expecting staffing reductions, according to survey findings published by PwC in August.
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“We're definitely seeing some more layoffs than we were before,” said Bill Driscoll, a senior district president at staffing consulting firm Robert Half.
The good news, for now, is that if layoffs impact you, there’s a good chance you’ll find a new job quickly, experts told USA TODAY.
Why are tech companies laying off workers?
Tech companies tend to suffer more than other industries when interest rates go up because they rely more on outside funding. When interest rates increase, it’s more expensive for them to borrow money. Since March, the Federal Reserve has raised interest rates by a total of 2.25 percentage points. The central bank is expected to hike rates by another 0.75 percentage point at its meeting later this month.
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It’s also possible that many tech companies had overly ambitious hiring plans coming out of the pandemic, which ended up being lucrative for many of them.
Where is hiring occurring?
Hiring is strongest in the leisure and hospitality sector, according to data from the Labor Department’s most recent Job Openings and Labor Turnover report. But the highest number of job openings is within education and health services followed by professional and business services. Collectively, these two sectors accounted for nearly 4.3 million of the 11.2 million jobs openings across the economy.
People who are laid off from tech jobs shouldn’t have too much difficulty securing a new job, said Jim McCoy, senior vice president of staffing firm Manpower: “The tech skill set, in particular, tends to be one of the most fungible and the most desirable across any industry sector.”
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From what he’s observed, the financial sector is being most aggressive at swooping up laid off tech workers. In contrast to tech, banks tend to benefit from rising interest rates.
What should you do to prepare for a potential layoff?
You started hearing murmurs that your employer may be looking into layoffs. You’re not sure whether the rumors you’ve heard are true. Don’t carry on as you normally would and wait to find out, McCoy said.
Even as many companies announce layoffs, they often have openings in other divisions or roles. It’s worthwhile to consider any openings that interest you or for which you think you’re qualified, he said.
Because the labor market is still so tight, it’s costly for employers to lose talent even if they need to lay off workers. That’s why many employers are offering internal training opportunities to bridge any skills gaps to help you get into a new role, McCoy added.
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“It's still absolutely a war for talent out there," Driscoll said. "So the employee is still very, very much in the driver’s seat." Even though he thinks most workers don’t need to be worried about layoffs now, it’s a good time to “make yourself indispensable to your employers.”
You can do this by asking for additional responsibilities or taking on challenging projects, he said.
Also, make sure your LinkedIn profile and resume are up to date. If you end up being impacted by layoffs, McCoy recommends adding the “open to work” frame around your profile picture since it “makes you really appealing to recruiters.”
Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here