A year ago, Lisa Mabry was laid off from her job as a software engineer at a software company in the Twin Cities. In five months, she sent her resume to nearly 300 companies.
In the end, she received only two offers.
“What I couldn't accept was [since] “If I had gotten another job, I probably would have been unemployed again,” said Mabry, who lives in Minneapolis.
Those months were stressful for Mabry. Mr. Mabry was sometimes the only person in his family who worked. In September, she started working remotely for a technology startup based on the East Coast.
“It was very worrying not having any income coming in,” she said.
Mabry and other tech industry employees faced an unexpected reality. An industry that has long promised endless opportunities and filled with hope is now oversaturated with candidates.
Mabry's environment is much different than when she changed jobs to become an engineer eight years ago. After that, her recruiter solicited her at least once or twice a day.
“At that point, I guess he thought he had made it,” Mabry said. “I thought, 'There's so much demand in this field. I'll never have to work so hard to find a job again.'”
Companies that rapidly expanded their tech talent pools to help move production online during the pandemic will be able to reduce operating costs and costs with help from the federal government's Paycheck Protection Program, which rewards companies for retaining and adding employees. The company has laid off a large number of employees over the past year to reduce the number of employees. Improve profitability.
Ben Solberg, a resident of Hudson, Wisconsin, previously served as Vice President of Digital Marketing and Digital Products at a large financial services company in Minnesota, where he led the software product and user experience teams. His position was removed more than two months ago.
Even with a resume, it was difficult to find a job. It's not uncommon for him to have 3,000 to 5,000 other applications for the position he's applying for. Given the age of his children, it would be better for him to change jobs rather than move for a job. But given the widespread acceptance of remote work, Solberg said that's not a problem.
The problem is that the tech industry is moving into an employer market because companies have an “absolutely rich pool of candidates,” and “I've never experienced a market like this in my life.” No,” he said.
Domino effect of layoffs
The current technology job market is causing an unusual number of layoffs across the United States.
Earlier this month, Tesla, Apple, and Amazon Web Services all announced job cuts. Tesla will lay off 10% of its workforce, affecting approximately 14,000 people. Apple announced it would lay off 600 employees, and AWS announced it would cut hundreds of employees from parent company Amazon's cloud computing business.
Among the local powerhouses, Jamf, a Minneapolis-based software company that provides Apple's device management and security features to large enterprises, cut its full-time workforce by 6% in January, leaving nearly 170 employees. announced that it would affect employees.
According to Layoffs.fyi, 74,672 jobs will be cut in the U.S. tech industry in 2024, and more than 260,000 more jobs are expected to be cut in 2023.
“Large-cap tech stocks are currently being rewarded by Wall Street for not just growth but also cost discipline, but other stocks are using this as an opportunity to right-size, and widespread layoff stories cover companies. “This is leading to some layoff contagion, as are individual companies choosing to do the same,” said Jeff Tollefson, president of the Minnesota Technology Association.
In Minnesota, the impact has been a little more muted. Minnesota companies are cutting some jobs in technology departments, mostly as a slowdown in hiring. Tollefson said Minnesota companies posted 5,483 IT jobs on their own in March, compared to 16,000 in May 2022.
Changes in the industry are impacting sales at Horizontal Talent, an IT digital and creative staffing firm in St. Louis Park. Co-founder and CEO Jeremy Langevin said customer requests fell by 38% in the second half of 2022. Last year saw a further 52% decline, with requests below pre-pandemic numbers in early 2020.
Langevin said inflation fears and rising interest rates had crept into the minds of policymakers, leading to a decline in employment. Horizontal itself made two cuts in 2023.
“I started getting nervous,” Langevin said.
This is a reaction to the rapid increase in employment. In 2021, Horizontal Talent saw a 78% increase in hiring requests for his position and thousands of people quickly entered the interview and hiring process as many companies expand their tech payroll. For example, Facebook's parent company, Meta Inc., increased salaries by 103% from 2019 to 2022, according to the SEC.
Why has Minnesota's economy slowed?
Langevin said many companies appear to be misjudging the sustainability of talent demand post-pandemic.
The advent of remote work has also allowed companies to expand their hiring quotas nationwide and offer offshore jobs to people in India, Latin America, and parts of Europe. Employers can pay $40,000 to Indian residents, he said, while the current rate in the U.S. is $140,000.
Meanwhile, rapid growth in the field of artificial intelligence has led companies to realize that “they may not need as many software engineers on their teams as previously thought,” Tollefson said.
John Tedesco, a founding partner at Arena Partners, a consulting firm for software companies, said fewer venture capital investments have also led to fewer jobs. With less cash under management, investors and funds concentrate on fewer companies, usually those that perform better. Low-capital tech startups slow hiring or lay off workers.
Meanwhile, Section 174 of the Tax Cuts and Jobs Act of 2017 removed the option for businesses to deduct research and development expenditures. Starting in 2022, companies like Minneapolis-based software development company Modern Logic will be able to pay all costs associated with research and development instead of reporting those dollars as an expense so they can hire developers to work on their projects. must be repaid within 5 years.
“It's very difficult to justify hiring people in the U.S. because it was 20 to 30 percent more expensive,” Modern Logic CEO Dustin Bruzenak said.
unusual experience
The current job market makes it difficult for recent graduates with computer science degrees or those who have completed coding boot camps, Tollefson said. But it's just as difficult for industry veterans like Susan G. and Abby B., two laid-off Twin Cities technologists. They asked that their last names not be published in consideration of their job search.
Susan works in software product management. Abby is a user and an experience researcher. Susan was laid off from her job at a tech startup in Los Angeles a year ago. She has been unemployed, except for a three-month contract this winter. Abby has been looking for a job for the past 10 months.
User experience researchers, whose job is primarily to research the market and determine whether a product is a good fit for a software or device, are among the jobs hardest hit in this layoff climate. she stated.
“That’s true. [about] Susan said, “Introductions are important, even just having a conversation with a recruiter.”
In Abby's case, her starting salary decreased by $30 an hour.
“I completely understand market forces and everything, but my skills haven't changed from two years ago,” she said. “I'm still worth the money.”
For years, universities and career development agencies have encouraged people to earn qualifications in software coding, web development, or user experience research. In the current environment, Abby said, it's a waste of money.
“It's not ethical to recruit people into these bootcamps at this point,” she says. “Even though I have seven years of experience, I am having such a hard time finding a job.''
