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Layoffs.fyi creator hopes for more job cuts - when it can ease

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The tech sector is starting the new year on just as shaky ground as the last: 150,000 tech workers lost their jobs in 2022, with more than half of those happening in November and December alone, according to Layoffs.fyi. And more than 18,000 tech workers were laid off in the first half of January at big players like Amazon and Salesforce.

More big layoffs are likely on the way, says Roger Lee, the creator of Layoffs.fyi and a San Francisco-based HR technology founder. He started tracking tech layoffs in March 2020, in part to connect unemployed workers with hiring managers at companies that are still growing during the pandemic.

Despite the recent deluge of layoffs, Lee says there is some hope that the current wave of layoffs can ease. Lee says the latest wave of tech layoffs began in the spring of 2022, around the time the Federal Reserve began its aggressive series of interest rate hikes.

“There is an obvious correlation between the Fed raising interest rates and these tech companies making layoffs,” says Lee. That’s because when interest rates rise, it becomes more expensive for companies to borrow money and expand their businesses. Many tech leaders, including Meta’s Mark Zuckerberg and Amazon’s Andy Jassy, ​​say the new layoffs are the result of excessive hiring over the past two years.

But, Lee says, “From now on, the Fed is likely to slow its pace of rate hikes, and many believe that by the end of this year, they will pause rate hikes and perhaps even start to reduce them.” When that happens, possibly in the second half of 2023, “I expect the increase in tech layoffs to finally subside as well,” says Lee.

It’s important to remember that the general job market is quite strong, and tech workers who are losing their jobs are quickly getting hired again. In November, the layoff rate was below 1% of the workforce and there were 1.7 jobs for every available worker, according to Labor Department data.

“There are a lot of companies still hiring and a lot more vacancies than layoffs, so there’s reason to be optimistic about people who have been laid off recently,” says Lee.

How to look for a layoff job

With layoffs in mind, Lee says it’s important to research a prospective employer’s tenure.

First, you should find out what the company’s current business priority is – are they rehiring, scaling or launching something new? What are they prioritizing and deprioritizing?

Then, make sure your experience aligns with the company’s priorities and your main business strategy at the moment.

If it’s a public company, Lee suggests looking at its earnings to get a sense of whether they’re profitable or on track. This type of information is more difficult to find for private companies, so you can ask a recruiter directly: is the company profitable? If not, how much box does it have?

You can also address the elephant in the room: How is the company prepared to deal with a possible downturn, and how does this particular role contribute to it?

It’s also worth asking if the company has made layoffs before. If so, what was the reason and how did they send the message? How did they deal with outgoing employees? How did leaders consider the impact on the morale and productivity of those left behind?

“People are more sensitive to it now,” says Lee. “Understanding the company’s past actions can give job seekers a sense of how the company makes decisions and how it treats its employees during the process.”

Also remember that while there are some patterns in recent layoffs, not all companies are equally focused on cutting costs. For example, says Lee, “While one company might be laying off its advertising division because it’s less focused on advertising revenue, another company might be investing too aggressively in advertising.”

Finally, Lee recommends checking to see if the company lists payment in their job postings and any other information about their online payment philosophy.

A handful of states and cities, including California, New York, Washington and Colorado, legally require employers to include salary ranges on their job listings. And Lee’s new site, Comprehensive.io, is a database of open tech jobs and salaries listed in one place.

Lee says job seekers can use this information to understand their overall market value and where they can land with a specific employer. Beyond salary potential, he adds, a company’s pay information “can be a sign of what they value, both in terms of fair employee compensation, but also just their approach to transparency with employees in general.”

Output check:

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