Maggie Rose Macar: Layoff, and off, and off — major tech job cuts and the 'recession'

There’s no way to say it nicely, so I’ll rip it off like a proverbial Band-Aid — layoffs, especially in the tech sector, are rampant. Hundreds of companies, many of whom originated in Silicon Valley, are cutting jobs at an alarming clip. Strangely, these layoffs happen at a time when the economy is growing pretty healthily; unemployment is literally the lowest it’s been in 54 years (3.4%!), inflation is steadily dropping from record highs, and consumer prices on classic markers like eggs, gasoline and used cars are decreasing.

But if you’re like me, then you may have noticed something else about the financial climate — something that doesn’t really track with the apparent good health of our latest economic news: It just doesn’t feel like any of us are doing that well.

It’s hard to put into words how the current economic climate makes me feel. I assume a lot of other Americans feel this weird, nonspecific angst about the economy. Why, when I know for a fact nearly everything is trending in a positive direction, does our experience of the current economy not match up?

The aforementioned tech industry layoffs are a good place to start. To name just a few high-profile cases: Alphabet (Google’s parent company) is planning to cut 12,000 jobs; Microsoft, 10,000 jobs; Dell, 6,500; and Amazon upwards of 18,000. Just in that example, we see some 50,000 lost jobs. Contrast this with the positive job reports and it becomes a bit easier to see the frustration that American employees are feeling toward the economy.

Since the beginning of 2023, over 500,000 total jobs have been added to the market. Also since the beginning of 2023, an estimated 105,000 tech jobs have been lost. The incongruity of it all stems largely (as it seems so many contemporary problems do) from covid-19.

During the pandemic, the tech industry grew, job-wise, as the demand for more and better remote work became more necessary than anticipated. Following the blazing economic indicators, the industry is being backed into a corner. As companies seek to fill more specialized — and thus more highly paid — positions, they are forced to let go of many of the people who had benefited from those covid hiring sprees.

Thus, the current weird situation we find ourselves in, wherein our economy is apparently booming, doesn’t benefit any but the most privileged few.

The mass tech layoffs seem to be affecting two major demographics particularly hard. According to Marketplace, “Between 2020-21 immigrants accounted for almost one-fourth of the STEM workforce … . High-tech hotspots like Silicon Valley and Boston’s Route 128 rely on immigrant scientists, engineers and entrepreneurs.” As a result of the layoffs, many of these highly skilled immigrant STEM workers may leave the corporate tech world in favor of more diverse careers in sectors like infrastructure, or manufacturing.

The same sentiments are proving to ring true with young STEM graduates, as well. With the ever-growing population of educated young people all vying for the same opportunities at the most well-known and highly regarded companies, an experience vacuum is emerging. No matter how skilled they may be, younger employees working for lower salaries are being eschewed for fewer, more experienced workers.

Unfortunately, the reality of our low unemployment rates — as much as it is good news for the long-term, big-picture welfare of our economy — includes some genuine and relatively immediate consequences.

Almost every somewhat major tech brand has announced a slate of job cuts as of mid-February. To someone like me who has experience in the tech startup space, it really says something about the screwiness of today’s economy that Microsoft-owned LinkedIn — probably the world’s foremost social network for jobs and business — has taken part in this widely publicized spate of layoffs.

So, no, we might not be in a “recession” as far as expert criteria are concerned. However, regardless of the indicators that say how healthy our economy is, what truly matters is how Americans feel about their finances, their wages, and, yes, their job security. A strong economy doesn’t necessarily mean that those good feelings get sent down the line to the average consumer and/or worker.

While, for all intents and purposes, the U.S. economy is not in a bonafide recession, that’s small comfort for the minds and wallets of people who are actually experiencing that economy; just ask the hundreds of thousands of tech workers that are being laid off in the next few months.

Maggie Rose Macar is the CEO and founder of the mental health services platform zant.