Unpacking the Tight Tech Talent Market: What the Recent Layoffs Really Mean
Tech layoffs are big news, but the labor market remains strong.
Despite frequent news stories about large-scale layoffs at tech giants such as Google, Meta, and Amazon, demand for labor in the U.S. still far exceeds supply. There are currently 1.8 openings for every unemployed person in the U.S. Yes, that’s down from a peak of two openings for each unemployed person, but still historically extremely high. In fact, according to PBS, before the pandemic the country usually had more unemployed people than open jobs.
The talent gap.
This tight labor market is further illustrated by the ongoing—and notably increasing—gap in available talent. The gap increased by 181K jobs between October of 2022 and January of 2023, even though January was the worst month to date for tech layoffs.
Total Nonfarm Jobs, Seasonally Adjusted - in Thousands (000)
Source: BLS JOLTS; CrunchBase
Workers are quickly finding new opportunities.
The recent tech layoff numbers are small compared to hiring activity across other sectors—with hiring rates above pre-pandemic levels in warehousing, healthcare, and many other industries. And although the tech sector’s hiring frenzy has slowed, it will have little impact on the overall labor market since tech talent is in high demand elsewhere. Among recent new hires, 54% said they found a new job within 30 days and another 34% within 90 days.
54% of recent new hires said they found a found a job within 30 days of searching, and another 34% within 90 days.
50% of recent hires heard back within 3 days of applying for a new position.
49% of recent new hires found a job in a different industry vs previous role.
Source: Forbes, ZipRecruiter
National demand for skilled talent remains high and the labor market is demonstrating resiliency. Workers are hearing back quickly after they apply for jobs and promptly finding new opportunities, with 49% of those landing a job in a different industry. Clearly, tech talent has options, and they are taking advantage of opportunities outside traditional tech companies.
Don’t write off tech yet.
Announcements the last few months may make it appear that tech is significantly constricting, but that’s not the case. After the pandemic, tech hired at such a ferocious pace that recent layoffs should be considered a moderate recalibration of talent, since most of the recent hires are being retained. According to Forbes, over the past two to three years Amazon added 18,000 new hires and recently has jettisoned just 2% of those new staff members. And Microsoft made 10,000 new hires in the same timeframe, laying off only 13% of those new additions. Big picture, the tech industry as a whole—including many significant subsectors—are continuing to add workers, just at a slower pace.
Navigating a changing market.
As you look to hire tech talent in this evolving and unprecedented market, it’s essential to take advantage of every opportunity to reach workers with the skills you need. At Kelly® Technology, we are experts at hiring experts in technology. We can provide the strategies, innovation, and insights you need to connect with the top talent of today. Whether you’re looking to fill one specific role—or assemble a tech team—our recruiters have the inside track on talent, even talent not actively looking. And we can also add value to your business with our full range of flexible, efficient workforce solutions and technology tools designed to support you to whatever degree you require.
Sources: “U.S. job openings remained high in sign of economic resilience.” (January 24, 2023) PBS. Retrieved on April 7, 2023 from https://www.pbs.org/newshour/economy/u-s-job-openings-remained-high-in-sign-of-economic-resilience