Navigating the Tech Hiring Freeze: Strategies for Students
Written on February 12th, 2024 by Naser
Photo by Clem Onojeghuo on Unsplash
The tech industry has experienced the largest layoffs in its history in the past 3 years, yet the same tech companies made the largest profit gains in their history during the same period. So what explains this dilemma, and what does it mean for Computer Science students today? In this blog post, I offer my two cents on the matter!
Let’s start by understanding what’s behind the layoffs to see if Computer Science is still worthwhile. Of course, every field is worth studying, even if landing a job is hard. Nonetheless, I understand that there are many pragmatic people who want the assurance of job security after graduation. I speculate that a number of reasons come together to cause several waves of layoffs in the past few years:
- The pandemic (not to blame everything on the pandemic): As expected the pandemic added to the uncertainty and instability of the US economy, causing many companies to consider a leaner workforce.
- The great resignation: during the pandemic a modern phenomenon appeared called the great resignation where people quit their jobs for many reasons. This led many tech companies to over-hire to ensure the availability of their workforce. Going out of the pandemic, layoffs took place to correct for over-hiring during the great resignation.
- Elon Musk: Say what you want about Elon, the reality is that he is admired by many people including tech execs at big tech companies. Therefore, when he demonstrates that Twitter (now X) can run well with a third of the workforce, many companies will attempt to copy this reduction in workforce.
- Shareholders: Tech companies found layoffs as an easy way to signal to shareholders that they run a tight ship, cut fat, and generate unprecedented profit margins.
- The AI hype: With larger, better language models promising increased productivity in every walk of life, tech companies are relying on AI to cover some of the gaps in their workforce. Of course, there’s some truth behind the AI hype, but I believe that the benefits of using AI in software development are somewhat exaggerated at the moment.
- Inflation: Coming out of the pandemic, The Federal Reserve was on an unstoppable mission to reduce inflation, and one of the main metrics that they hoped to increase was unemployment rate. When people have fewer jobs, they have less money, so they spend less resulting in reduced inflation. At the same time, higher unemployment rate means slower economic growth, which is bad for tech companies. Therefore, the genius solution was to lay off high earners at tech companies, resulting in a higher unemployment rate. This intricate dance achieves higher unemployment rate, lower inflation, without slowing down the economy as tech companies report record profits.
- Economic uncertainty: When the economy is somewhat in an unfamiliar state, many companies are cautious to hire. Moreover, venture capitalists are deterred by the risk of investing in tech startups, as less risky investments such as bonds carry good profit margins.
If you reach this point in my blog post, you are probably impressed with my knowledge of economics (thanks!), and also you might be wondering what all of this means for people looking for jobs in tech right now. I would like to direct your attention to the fact that none of the factors listed above had anything to do with tech industry having a real crisis of any sort, in fact tech companies are leading the stock market. Therefore, my impression is that the difficulties of finding a job at the moment will be short lived (hopefully), and things will get easier once interest rates start to go down. Here are the reasons why I think that Computer Science degrees remain in high demand:
- Department of Labour Projections still show that tech jobs will grow much faster than other fields in the next decade.
- Companies will learn the ultimate software engineering lesson: the most expensive software defects are the ones you discover during deployment not development. To elaborate on this point, companies rely on exaggerated AI productivity metrics to reduce their workforce, then they will understand that source code quality matters more than productivity. If I want to give one extreme example, we can look at the software bug that plagued the Boeing 737 Max. A single bug in the code resulted in two accidents, many deaths, and a massive reduction in Boeing’s valuation. Any gains in productivity during code writing will not justify the cost of the defect in production.
- After the AI hype companies will realize that AI does not replace tech jobs, in fact they need to hire more people to run the AI endeavors they promised their shareholders. Also, when every company has AI on its side, they will look for other ways to compete and hiring highly skilled people will never be an obsolete idea.
What does all of that mean for people looking for jobs right now? Here are my suggestions for people who are going through the tough process of finding a job:
- Stay Resilient: First and foremost, don’t overstress and take this personally. Everyone is going through the same difficult process. Perhaps there’s consolation in going through this with many people. Make sure that you take care of your mental and physical health. Things will get better, as Frederick Douglass once said: If there’s no struggle, there’s no progress.
- Skill Development: This is a chance to learn and gain more skills. Grow your resume with projects, certificates, new skills, or even consider graduate school (if that’s something that you want to do).
- Master AI: AI is the new norm, and employees will not be replaced by AI, but possibly they will be replaced by other employees who know how to use AI. Learn as much as you can about AI and machine learning, and use it daily.
- Freelance Opportunities: Consider freelance tech work for local businesses. Many small businesses don’t know how much their lives can be enhanced by incorporating technology into their work. Simple ideas like creating a website or a QR code system for a business can be great ways to gain experience and grow the good old resume.
- Networking: I know many people hate networking, but this is your chance to connect with more people who might be going through a similar situation. Your network is your eyes into the world, and you can learn a lot about opportunities by connecting with people.
- Referrals: When companies receive thousands of resumes for an opening, referrals become your best way to land an interview.
In conclusion, the job market challenges are temporary, and Computer Science degrees remain valuable (in my opinion). Stay resilient, keep learning, network, and leverage referrals. Best of luck in your job search, and I hope that something in this post proves helpful.
