A Blog by Jonathan Low

 

May 22, 2020

How Covid Layoffs Are Reshaping the Silicon Valley Job Market

Tech companies in Silicon Valley, from big tech to startups, have laid off considerably more than 100,000 workers - and the pain is not over. It is not clear that hiring will resume at the same pace once it is perceived to be safe to return to the office - and many big firms like Twitter and Facebook have indicated there may be no return.

This could mean that tech jobs with non-native tech firms will become the new focus for those with less marketable skills. And the shift to remote work may also mean that the work will no longer be centered in the San Francisco Bay Area. The good news is that some firms previously unable to compete for skilled talent may now find them more available - and affordable. JL

Asa Fitch reports in the Wall Street Journal:

Jobs lost in the San Francisco Area have reached 118,000. Uber, Lyft and Airbnb account for 10,000 positions lost this month. Tech startups have seen more than 56,000 layoffs since the pandemic hit. U.S. IT employment fell by 112,000 in April. Recruiters and executives say they don’t expect tech hiring to rebound quickly once a recovery sets in. People with experience will find new employment in post-coronavirus tech. For those with thinner résumés, prospects may be darker. (But) some companies see the layoffs as a chance to secure talent because they couldn’t compete (before this) with big tech.
Hours after Joe Taylor was laid off by Uber Technologies Inc., as part of the ride-sharing company’s far-reaching cost-cutting, the hardware engineer began looking for a new job. What he’s seeing is a Silicon Valley job market that has lost its spark.
The tech industry has been one of the most resilient sectors of the economy during the Covid-19-induced economic downturn. Microsoft Corp. and Amazon.com Inc. reported strong sales growth for the first quarter even as quarantining measures came into effect. But major layoffs at big companies including Uber and Airbnb Inc., as well as a host of smaller startups, have shaken any sense that the tech industry is insulated from the broader employment destruction—and, for many, undermined hope that jobs lost would be easily replaced.
“Everyone’s just a little more wary,” said Mr. Taylor, 38 years old, who was let go earlier this month. Fewer recruiters have gotten in touch than in past job hunts, he said, as he’s scoured opportunities at large and small firms. The message from many recruiters, he said, has been: “I don’t have anything right now, but let’s stay in touch.’”
Mr. Taylor, during his 15-year career spanning big companies like Microsoft and San Bruno, Calif.-based Spansive, a startup making wireless chargers, has seen ups and downs before in Silicon Valley’s job market, including during the 2008 financial crisis. In its boom times, companies have offered bountiful pay and benefit packages in the race to secure talent. Now, however, Mr. Taylor and other tech workers point to signs that the race has cooled significantly.
Before, Mr. Taylor said, he would set his LinkedIn profile to show he was open to opportunities, and the recruiters would come flooding in. “You’d flip that switch and get 10 opportunities a week or something like that,” he said. “This time, you flip that switch and you get two or three hits.”
Uber on Monday announced it was laying off a further 3,000 people, two weeks after announcing around 3,700 job cuts, bringing the total to about a quarter of its workforce. In recent weeks, rival Lyft Inc. said it would slash 17% of its staff, and Airbnb said it is cutting about 25% of its jobs after bookings on its site plummeted with people largely unable to travel.
The three account for almost 10,000 positions lost just this month, with many more jobs gone across Silicon Valley, adding to the ranks of the nearly 36.4 million applications for unemployment benefits in the U.S. in the weeks since the Covid-19 outbreak hit. Tech startups have seen more than 56,000 layoffs since the coronavirus pandemic hit, according to Layoffs.fyi, a job-tracking site.
Several tech companies that have avoided job cuts have publicly or quietly instituted hiring slowdowns. Among those easing off is Microsoft, which has temporarily frozen recruitment for some roles while continuing to hire in strategically important areas, according to a spokesman. Google, the search giant owned by Alphabet Inc., publicly announced last month a slowdown in hiring.
What’s now unfolding could reshape the long-term prospects for job seekers in Silicon Valley. Recruiters and some executives have said they don’t expect tech hiring to rebound quickly once an economic recovery sets in. “I don’t think you’ll see us adding back at that same level,” Uber Chief Financial Officer Nelson Chai said recently.
Two months of experience with the bulk of their employees working remotely also could change employment practices, potentially diminishing the focus on fabled Silicon Valley campuses that companies such as Apple and Facebook built and shifting some work overseas to cheaper workers.
Recruiters and tech employees say changes in the job market could mean people with sought-after experience likely will find new employment in the post-coronavirus tech economy. For those with thinner résumés, prospects may be darker, they say, in a market overflowing with talent at a time when companies are more conservative.
Asa Shoemaker, another Uber employee laid off recently, had worked on the company’s bike- and scooter-rental businesses assisting research and development engineers for about a year, before which she was a bike mechanic working on contract. Her Uber gig, she said “was a dream job.”
Ms. Shoemaker said she’s taking a pause before testing the job market, and is leaning on a group of other laid-off Uber employees who are banding together on a Slack channel to help each other find new work. But she isn’t confident about prospects when she returns. “There are many job listings, but no one on my team that I know of has gotten any serious offers.”
Tech’s job losses remain a small slice of the nearly 36.4 million applications for unemployment benefits in the U.S. in the weeks since the Covid-19 outbreak hit. U.S. information technology employment fell by a record 112,000 jobs in April, erasing a year’s worth of gains, trade group CompTIA said earlier this month, citing Labor Department statistics. Total jobs lost in the San Francisco Bay Area, the center of tech in the U.S., have reached at least 118,000, according to a tracker maintained by the San Francisco Chronicle.
Despite the downturn, though, some tech workers are finding jobs with companies that see the layoffs as a chance to secure talent they struggled to land only a couple of months ago because they couldn’t compete with some of the big tech companies then still gobbling up workers.
Harriet Ukaoma, who was among some 120 people laid off by recruiting startup Greenhouse Software in April, said after some intense legwork, she had 13 first-round interviews lined up a week after losing her job. She said she was recently hired at Clever Inc., an education startup in San Francisco.
Coalition Inc., a startup that offers insurance against cyberattacks, recently raised a $90 million funding round and has hired about 20 people since March. It has plans to add 80 more this year to address what it sees as a growing market for its products among risk-averse companies, Chief Executive Joshua Motta said.
“We’re really in a position to invest, even ahead of the growth,” Mr. Motta said. “I think a lot of businesses, ourselves included, who are in a favorable position have been asking how can we press our advantage and make those investments that maybe others can’t.”

Large tech companies are also busy hiring in some of their fastest-growing areas. Amazon Web Services and Zoom Video Communications Inc., the videoconferencing software that has become a fixture of stay-at-home life, are among those still hiring. Facebook Chief Executive Mark Zuckerberg last month said the company would add at least 10,000 people in product and engineering roles this year.
“Why would you not try to double down if you have the cash to be able to leverage that?” said Jonathan Buzelan, the co-founder of Recruitr Labs, a tech talent advisory firm.
What has definitely changed for Silicon Valley job seekers is how the hunt for employment is playing out, given limits on in-person meetings. Interviews are mostly taking place via Zoom or similar tools, although some companies are finding creative ways to get people together physically. One technique, said Brian Kopp, an executive senior consultant at Talentfoot Executive Search, has been to arrange meetings between a potential employer and employee over a round of golf while maintaining appropriate social distance.
American corporations’ growing comfort with remote work has also led Mr. Taylor, the former Uber engineer, to look for jobs farther afield, including in Denver. He plans to remain in the Bay Area, working remotely if needed, but the trappings of a nearby tech-company office no longer feel essential.
For interviews, he shows up on Zoom calls in a Brooks Brothers blazer, a button-up shirt with French cuffs and a San Francisco Giants baseball cap to hide his unruly quarantine hair, with pajama bottoms underneath.
He feels a sense of urgency given that the tech companies still hiring have a limited number of positions to fill, and the number of people on the market is growing.
“I really wanted to try to hit the ground running with this because my fear was that there’d be more and more layoffs,” he said.

1 comments:

Post a Comment