With 5,900 tech jobs already gone, the Seattle correction looks real

The string of layoffs by Amazon and other Seattle-area tech employers has many asking whether the tech industry is bound for a major correction and more job cuts in the coming months.

In fact, this patch may already be in the works.

Last month, employers in the Washington information sector cut 5,900 jobs, according to the October employment report from the Department of Employment Security.

This is one of the largest monthly declines in the state’s history. While it’s still too early to tell how bad things are, the losses so far are already a poignant reminder that the pandemic boom of tech “wasn’t necessarily sustainable,” said Anneliese Vance-Sherman, a regional economist at ESD who covers the Seattle area. .

The October report wasn’t all bad news. The technology woes don’t seem to have hit the rest of the labor market, which still managed a net gain of 5,400 jobs in October. Hotels, restaurants and other leisure and hospitality businesses led the way, with 4,400 new jobs, and even the construction industry, although the housing market cooled, grew 700 jobs.

While the state’s unemployment rate rose from 3.7% to 3.8%, Washington has not seen an alarming rise in jobless claims. More than 5,800 people from Washington applied for benefits last week, according to data published Thursday. This is up 28% from the weekly average for October, but not in line with seasonal patterns, and still 23% lower than the rate applied during the same week in 2019.

But these encouraging trends are unlikely to hold. Tech losses in October didn’t include all of the recently announced layoffs at Amazon, Meta, Convoy, Zillow, Redfin, and other tech companies.

In part, that’s because the October numbers came from the mid-month poll, just before more recent layoffs were announced. Equally important, the “information” category includes jobs at employers such as Microsoft and Meta, but excludes some technology-related jobs at other employers, such as Amazon, which is rated as a retailer, and Zillow and Redfin, which is rated as It’s real, said Vance Sherman.

ESD economist Paul Turek said the October losses also do not include any of the contractor positions that were canceled during that period.

All told, Washington looks set to lose as many as 18,000 technical or technology-related jobs in just two months. This exceeds what the country lost in the Internet crisis of 2001-2003, when many Internet startups collapsed and thousands of workers found themselves without jobs.

These historical comparisons come with important caveats.

Today’s losses are coming in a much larger tech sector. The decline of 18,000 jobs represents less than 4% of the current tech workforce. Losses in the dot-com crash accounted for about 10.5% of the sector’s workforce.

And just as importantly, many experts see the internet’s meltdown as an inevitable correction after years of overemployment and unrealistic business expectations.

By contrast, the pandemic hiring boom reflected strong demand for tech products from consumers isolated at home and employers rolling out remote work.

Although demand hasn’t been sustainable at those levels, the industry still sells a lot of these services, making it hard to predict how long tech layoffs will last.

For example, Amazon CEO Andy Jassy said Thursday that the 10,000 announced layoffs will continue through 2023, meaning some may have to wait months to see if their jobs are secure.

Vance Sherman said the temptation to use historical trends to “see what the future is going to look like … misses a lot because that’s something very different.”

One major unknown: whether the Seattle area can absorb all of the laid-off workers, or whether some may need to shift to other industries or other locations.

Some recruiting and staffing experts believe that layoffs by Amazon and other big-name tech employers in the Seattle area will allow smaller tech employers to eventually hire enough talent.

But some in the job market are wondering if smaller employers have the budget to hire the large number of soon-to-be available workers, especially for the highly specialized, high-paying roles that are common in the Seattle area.

The offers he’s received are all out of state, and all for less than what he was making at Amazon, said Nadir Khan, a former AWS employee.

“If you’re overpaid at a big tech company and… you get laid off, it’s very likely that you’ll make less money,” Khan said.

#tech #jobs #Seattle #correction #real

Leave a Comment

Your email address will not be published. Required fields are marked *