Study: 42% of Tech Workers Were Semi-Surprised By 2022 Layoffs
Economic instability in the wake of the pandemic continues to ebb and flow as a combination of surges in COVID-19 across communities, rampant inflation, and the ongoing Great Resignation, force businesses of all sizes to reconsider their operating costs to stabilize profitability. Unable to gauge or even keep up with cost and supply lines, many organizations are turning to one of the few lines on their P&L sheet that they can control to reduce costs: labor.
Layoffs typically occur during economic slowdown to help businesses survive the lean times between economic booms, especially in the technology sphere. As portions of the economy began to recover earlier this year in 2022, tech industry experts in the media started talking about just how chaotic the tech industry has performed, with data showing that the market segment has experienced several cycles of growth and decline.
These cycles are natural for the tech industry but often occur over much larger periods. The uncertainty has forced many established high-tech names to execute mass layoffs—that is, either laying off at least a third of their workforce in 30 days or 500 employees or more in less than 30 days, regardless of company size. Tech giants like Netflix and Big Tech leader Microsoft have executed significant layoffs, alongside SoundCloud, cryptocurrency platform Coinbase, and automotive platform Carvana. The range of technology-focused organizations across industries executing layoffs has been a major component in many economists’ predictions of an impending recession, and a blow to tech industry employees.
Tech workers have voiced their shock across social media and job satisfaction websites for months. They are largely expressing how they’ve been somewhat surprised by layoffs in their specific labor market, considering the strong performance and profitability in many sectors combined with a consistently low unemployment rate. With inflation and recession fears spooking the leadership of many organizations, our contributors offered insight into warning signs one should look out for and how best to navigate the other side of a layoff.
Partnering with Pollfish, UpCity surveyed 600 tech employees affected by or have peers who have faced a layoff in 2022. We also took a deeper dive to find potential reasons these positions were eliminated, whether there were warning signs or indications the layoff would take place, how they’ve responded in the time since, and where they are currently in their job search. We broke our findings down according to:
- Organizational Layoffs
- Job Searches and Next Steps
42% of tech workers recently laid off worked in hybrid roles
Layoffs throughout the pandemic focused on minimizing overhead costs to best adapt to and survive reductions in sales and revenue. While some businesses fully embraced remote work despite easings of social distancing and quarantine measures, many organizations kept their brick-and-mortar offices for hybrid work arrangements or a full return to the office. These organizations needed to reduce costs through labor reductions, discovering that they still meet consumer demand with reduced staffing levels. Remote teams, on the other hand, have been comparatively stable and able to maintain existing staffing levels because of cost savings elsewhere in the P&L sheet.
21% – Fully remote
38% – Fully in-office
42% – Hybrid
47% of respondents noted that the lay-off was announced to them in person and 55% said that they were told privately
While there are significant protections in place regarding mass layoffs, they don’t always necessarily apply in the case of a staff reduction. Therefore, there are few standard practices around how best to inform staff of a layoff, which can lead to extremely mixed feelings and reactions to the news of something that can impact a worker on a personal level. According to our respondents, less than half of all respondents were approached and informed on a personal, face-to-face level. This could be a result of remote work or hybrid working arrangements making video conferencing and email easier methods for reaching out to a distributed team.
HR professionals and business will make the argument that impersonal mass communications of staffing reductions save time and resources, and removes the personal element from the process, allowing businesses to keep layoffs professional and still adhere to legal obligations such as timely notification.
Notifying employees in this manner allows the business to communicate all necessary information regarding severance, timelines, and links to schedule personal consultations with HR representatives for those with a need to do so, ensuring every employee’s layoff experience is as uniform as possible, and yet still completely customizable if necessary. By providing a uniform path toward unemployment, the organization is protected against liability or claims of unfair treatment.
16% – The layoff occurred over a video call
36% – I received notice of my layoff via email
46% – My layoff was announced to me in person
1% – Other
45% – My layoff was announced in a group setting
55% – My layoff was announced privately to me
24% of tech workers impacted by the 2022 layoffs were laid off in February
Traditionally, summertime is one of the most volatile periods for staff retention as consumer habits tend to shift from June through August. Another period often associated with layoffs and downsizing is between December to January, the point at which many budgets transition from the previous year’s strategy to that of the new year. For reference, most companies executing layoffs in 2022 did so in February through April. First, the 2021 holiday season far surpassed the expectations of financial experts.
This led to the second factor in play, which many know as the uncertainty introduced by inconsistent economic responses to surges in COVID-19 across different geographic regions requiring many companies to revisit their 2022 budgets. Finally, layoffs spiked late in the first quarter of the year and into the second quarter due to early rhetoric surrounding inflation and the possibility of a recession, leading businesses to take preventative measures to avoid the hardships they faced at the start of the pandemic in 2020.
14% – January
24% – February
22% – March
20% – April
12% – May
6% – June
3% – July
43% of respondents worked at their organization for 3-5 years before their layoff
With any organization, the goal of a layoff is to effect the most efficient reduction in expenses without hindering the ability of your remaining team to meet customer demands for services and products. That means the staff most at risk during economic uncertainty are those with responsibilities that are easily shifted up or down the chain of command.
Newer employees tend to be paid less, have more drive and ambition, and often agree to increased responsibility without financial incentive as long as they know that recognition and future opportunity are benefits of doing so. On the other end of the hierarchy, employees who have been with a company for more than six years tend to make these decisions or carry out staff reductions and absorb the additional workload.
9% – Less than one year
26% – 1-2 years
43% – 3-5 years
16% – 6-9 years
6% – 10+ years
45% of respondents described their organization as a mix of B2B and B2C services
For the technology sector, many of our respondents are B2B service providers or cater to a mix of business and consumer clients. Mixed business model service providers are the majority of those seeing layoffs, perhaps because hybrid service providers have teams that can be consolidated into a single service channel that takes on the responsibility of meeting the needs of both consumer and business clients.
35% – B2B only
19% – B2C only
45% – A mix of both B2B and B2C
A majority of laid-off tech workers worked at an organization with 51-150 employees and 44% of employees were laid off from an IT service-related role
Retaining in-house IT staff and maintaining IT services on-premise are costly undertakings, and many business owners tend to prioritize marketing, sales, and client management inhouse while keeping operations lean and spare. This has led to many IT services being outsourced to a software-as-a-service platform or delegated to a managed services provider, freelancer, or consultant. Larger organizations with more revenue and a brick-and-mortar presence tend to retain IT-focused employees in-house, but the push towards remote or hybrid arrangements changed the demands businesses have, reducing the need for extensive teams of IT specialists in-house and causing this to be one of the first roles businesses look at when reducing staff via layoffs.
17% – 2-50 employees
42% – 51-150 employees
23% – 151-250 employees
18% – 251+
13% – Accounting & Finance
14% – Marketing & Advertising
44% – IT Services
9% – Human Resources
16% – Sales and/or Customer Service
3% – Other
43% of respondents said that they were somewhat surprised by their layoff, while 14% said that their organization announced the possibility of layoffs prior
Layoffs are a tricky business tactic to execute in a way that doesn’t damage a business’s overall productivity, and if poorly managed, can do more damage to the organization’s morale than it saves in operating costs. This can be especially true when market conditions are either trending positive or at the very least inconsistent enough that a layoff is unexpected. As employees see it, the economic rebound and success of the last year combined with economy-wide staffing shortages led many to believe that their jobs were secure, especially in the tech field. It’s only been the increasingly strident rhetoric surrounding massive inflation and the potential of a recession in the last few months that could have been interpreted as precursors of impending layoffs.
Even if workers anticipated a layoff, the Great Resignation has shown signs that small businesses are still hiring to support the growth they continue to see and to replace staff and fill new roles that have grown out of that success. Still, with 68% of respondents to our Pollfish survey showing at least some surprise at being laid off, there’s a disconnect in the messaging that leadership is using to communicate the profitability of the last year to investors and stakeholders and the alignment of that success to future strategic initiatives.
32% – I wasn’t surprised, I expected it
42% – I was somewhat surprised
26% – I was extremely surprised, I wasn’t expecting it at all
Like most industries this year, the tech industry has been sending mixed signals to employees. While some businesses are actively hiring to restaff in the wake of mass resignations of employees seeking better opportunities, other established tech firms are executing layoffs for many reasons. With a high percentage of our respondents seeming to have been caught off guard by layoffs across the tech sector, we opened our inquiry to a wider segment of tech professionals across the economy to find out if this was a widespread feeling.
“I was not surprised by the wave of 2022 tech layoffs because I had been hearing rumors about it for a while. I’m not sure why there was such a sudden increase in these layoffs, but it’s likely due to a combination of factors including the pandemic, the market, and changing priorities within companies.”
—Brian Hong, Owner & CEO, Infintech Designs
“I wasn’t much surprised by the recent wave of tech layoffs. The job market is pretty uncertain right now. With the looming threat of a recession, things are not looking great. So, it’s not surprising for companies to cut as many costs as possible, even if it means getting rid of their employees.”
—Dan Shepherd, Owner & CEO, VEI Communications
“Watching the tech industry grow over the past decade, it was hard not to think the bottom was going to fall out at some point. You could be forgiven for thinking it wouldn’t but the pandemic was the final nail in the coffin. Stimulus money coupled with a growing remote workforce translated to a tech boom. That boom was not maintainable, though. A remote workforce meant that technology companies that were geographically locked to only recruit from their area were suddenly able to recruit from anywhere.
This meant a larger talent pool but also higher salary requirements from the employees they were either recruiting or trying to retain. During the boom, these higher salaries seemed worth it. Now that the market has sharply shifted those salaries are a real hit don’t the bottom line. When you’re dealing with intangible products like a lot of tech and software, the only way to cut costs is to cut people.”
—Peter Robert, Founder & CEO, Expert Computer Solutions
Respondents who anticipated the layoffs, despite little to no notice from leadership, pointed to several factors indicating a layoff was a possibility. Aside from layoffs elsewhere in the organization or announcements of an imminent layoff provided within the legally required window of time, other signs painted a fairly clear picture to employees that their value to the company had been diminished. Many experienced reductions in hours or benefits, while others were gradually excluded from engaging with other teams and projects they’d been working on. Other signs came in the form of hiring freezes and sudden cessation of expansion. Often, these measures were accompanied by departmental restructuring and role expansions elsewhere in the organization. Finally, while the pandemic recovery period has been one of financial success for some businesses, other sectors have been suffering and quarterly and annual earnings reports revealed this year just how underwater many businesses found themselves, which led to many of the subsequent layoffs reported on by the media.
10% – Other employees had been laid off prior to me
14% – The company announced the possibility of layoffs
10% – There was a hiring freeze
9% – I was excluded from meetings I normally attended
11% – The company was in the process of restructuring
11% – My normal hours were reduced
11% – My benefits and/or normal pay rate was reduced
12% – The company was knowingly enduring a financial hardship
12% – Company expansion was stopped and/or significantly reduced
As our respondents point out in painfully clear terms, it’s often clear in hindsight just how clear the signs are that a layoff will take place. We wanted to give the tech professionals in our readership some guidance on signs to look for and an idea of what the workplace might look, sound, or feel like in the weeks leading up to a layoff.
“There are some behaviors you can watch out for that might signal a layoff is in the works at your office. Leading up to a reduction in staff, your boss is more focused on what you’re doing wrong than what you are doing great for the business or organization, and your performance review ratings have dropped. You should pay attention to the language of the performance reviews, especially direct quotations, even though ratings and data can be changed. Compare the ratings from your most recent performance review to the previous year.”
—Tiffany Payne, Head of Content, PharmacyOnline.co.uk
“Some telltale signs that a company may be preparing for potential layoffs include reducing or eliminating employee perks, such as free food or transportation; instituting hiring freezes; and cutting back on marketing and advertising expenditures. Other signs may include increasing pressure on employees to meet goals and deadlines, or canceling or postponing company-wide events. Of course, it’s important to keep in mind that not all of these signs necessarily mean that layoffs are imminent. But if you see several of them happening at your company, it’s worth paying attention.”
—Linda Shaffer, Chief People Operations Officer, Checkr
“Awareness of belt-tightening is at an all-time high. When a company starts closely examining all financial activities and requesting approval from higher management, it’s never a good sign. Another sign of impending layoffs is when a merger or purchase has taken place. While this development may be prudent for the organization, it isn’t necessarily a positive sign for the staff. Layoffs could occur because redundant employment is superfluous. You’re being kept in the dark; are you beginning to feel alone? Getting removed from mailing lists or being excluded from team meetings? Speak up. Ask why you haven’t received an invitation and express your wish to join.”
—David Reid, Sales Director, VEM Tooling
Being aware of the indicators that a layoff is looming over the horizon can be helpful for future roles to help stay ahead of any future uncertainty in the economy tech employees might face. However, for those who have recently become victims of a layoff, we felt it was necessary to provide more robust guidance on how to prepare for a job search in a potentially challenging economic landscape.
Job Searches and Next Steps
25% of tech workers noted that they started job searching immediately after their layoff
Experts are honestly somewhat divided on this front, and much of the disagreement comes out of the assumption of whether or not you’ve prepared yourself professionally for instability in the marketplace. In some industries, layoffs have displaced long-term employees who have been with the organization long enough to have allowed their resumes and online networking resources to become out of date relative to skills necessary to perform in their current role. One thing that the Great Resignation has shown us, however, is that many businesses are willing to diversify the field of candidates they are considering for positions, accepting that industry experience should not always be prioritized over soft skills and the ability to adapt and grow into a role from a similar role in another industry.
It’s from this standpoint that recruiters and consultants are advising jobseekers to immediately revise their resumes to target relevant roles and immediately start seeking employment, as businesses across all sectors are still actively hiring despite layoffs elsewhere.
25% – I began job searching immediately
19% – I filed for unemployment
17% – I reached out to my social network
17% – I contacted a recruiter
23% – I took some personal time off to figure out my next steps
Being laid off or let go from a job can be an emotionally damaging experience. The stress and mental weight of being unexpectedly unemployed in our economy, which is potentially on the verge of a recession, can make it difficult to take the necessary steps to take necessary steps to stabilize finances and other obligations. However, our wider community of tech experts had advice for that too.
“This might be odd advice for the unemployed and those impacted by layoffs but investing in additional tech and non-tech skills is the key to being competitive right now. This means they have to upskill and learn new technology to gain opportunities in the highly competitive tech space. Diversifying their skills portfolio is also important right now. This means software developers should not be content with their skills and continue to learn other skills for both the back and front end. Some may also diversify their skills portfolio by also learning non-tech skills as well as other creative skills because this will give them an edge over other applicants.
Creative staff should also be able to learn highly technical skills so that when management asks them what they can offer the company as additional skills and possibly move up their career ladder to another position with a higher salary. Given the economic situation right now, many tech companies have frozen hiring and instead just give additional tasks or promote an employee to multiple roles. Many companies right now want multitaskers and skills rockstars who can juggle many responsibilities all at once. Having additional knowledge and skills aside from your field of expertise would come in handy at some point and not be impacted by layoffs when employers know you are more valuable to them than others.”
—Victoria Mendoza, CEO, MediaPeanut
“Seek to obtain a mentor. It is vital to remember, after being laid off, that many others are in the same situation as you, in addition to others who have experienced layoffs during previous periods of economic crisis. Reach out to admired former coworkers with experience or request guidance on a professional social networking site. Developing a relationship with a mentor can help you obtain industry-specific advice and also provide an outlet for emotional support and venting.”
—Max Whiteside, SEO & Content Lead, Breaking Muscle
“My advice for people who’ve been laid off is to look in their network. Over the years, you’ve probably built a strong network. You’ll find that many small tech startups are hiring en masse right now. These jobs will be much more suited to you than those at big companies and giants.”
—Simon Bacher, Co-Founder & CEO, Ling App
“My advice is to polish your people skills before applying for the next one. Many AI tools are replacing the need for our input. However, you can stand out from other applicants by honing your soft skills. This will help you keep your job in these uncertain times. As a result, you’re on top of your game with both hard and soft skills.”
— Oliver Hudson, Marketing Manager, Word Finder
53% of respondents are now working in new full-time roles and 71% of respondents still work in a tech-related industry
The larger organization tech sector layoffs have been largely offset by hiring initiatives in small- to medium-sized businesses experiencing growth as they’ve pivoted business models to the changing demands of customers and businesses. A common point of advice for tech workers is to remember that technology is becoming increasingly relevant and actively leveraged across almost every industry. This means that there are relevant technology-focused opportunities for job seekers in firms operating in non-technical industries.
For example, advertising and marketing agencies need to become tech-savvy to build and support relevant solutions for their clients. So even if you’ve spent several years, for example, focused on IT support in health care and medicine, your foundational technical skills still make you a strong candidate to transition to advertising and marketing. Many job seekers who have been laid off are taking personal time to reimagine their experience and acquire the soft skills necessary to pivot to a new industry and transition back into the workforce once they’ve accomplished this goal.
53% – I’m employed full-time
16% – I’m employed part-time
14% – I’m temporarily self-employed and/or freelancing while searching for another role
3% – I’m self-employed and/or freelancing permanently
10% – I’m still unemployed and exploring new opportunities
3% – I’m still unemployed and don’t plan to re-enter the workforce at this time
71% – I’m still working in a tech-related industry
28% – I’m working in a non-tech-related industry
1% – Other
26% of tech workers found their new job directly on their new company’s website
While job boards are still a fairly popular avenue for recruiting in some industries, many companies are leveraging tactics similar to advertising and marketing to drive targeted candidates through a specific inbound funnel directly to a landing page on their website. This allows potential employers to ensure that candidates have taken the necessary steps to apply for a role they are truly interested in and provides necessary data about the candidate to the employer that they can use to improve hiring practices.
Increasingly, networking platforms have become invaluable employment search tools, as personal relationships developed on them allow job seekers to leverage existing relationships with friends, peers, colleagues, previous vendors, and others who might be familiar with the quality of work in an interview with a potential employer. More traditionally, many job seekers are establishing relationships with recruiters and staffing companies, which allows them to similarly leverage the professional networks of those entities in their job search and open doors to opportunities they might not otherwise even have been able to discover.
15% – Job board
22% – Personal connection/referral
26% – Found the job via company website
17% – Recruiter/staffing agency
19% – My former employer assisted me with a new job placement
1% – Other
15% of tech workers used a job board to find their new role and 27% of those respondents specifically leveraged LinkedIn Jobs
LinkedIn has emerged as a powerful professional tool for connecting job seekers interested in applying for an open position with others at that organization. LinkedIn is one of the most direct and simple ways to introduce yourself as a job seeker and truly highlight your skill set via the robust personal profile you create on the platform. While Indeed, Glassdoor, ZipRecruiter, and FlexJobs were referenced by respondents in our Pollfish survey results, none of these platforms truly allow a candidate to make a personal connection with decision-makers.
27% – LinkedIn
23% – Indeed
8% – Monster
13% – Glassdoor
3% – SimplyHired
12% – FlexJobs
4% – AngelList
12% – ZipRecruiter
25% of respondents who remain unemployed from their layoff stated that they’re currently job hunting
While businesses across the economy are still actively hiring for specific technical roles, it’s not a guarantee that someone who is laid off will immediately find an opportunity to rejoin the workforce. As we pointed out in a previous section, this is where the need for job seekers to cross-skill to improve soft skills and do their research about the opportunities available in their geographic area will help them tremendously. Commentary from media sources and employers alike across industries point to the fact that the more flexible a candidate can be in how and where they want to work, the more opportunities will become available to them.
For those still struggling to find a job after a layoff, it’s crucial to take advantage of any job search and employment support services offered by your previous employer. Be sure that you’re adapting your resume and other professional documents and portfolios to the specific roles to which you’re applying, rather than depending upon a single universal overview of your skills and experience.
Whether providing care for a loved one or taking the opportunity to travel, those who haven’t returned to work are taking the opportunity to improve their quality of life and align their job search with those requirements. Others are taking a practical approach and dedicating a portion of their time to continuing education to establish the credentials necessary to pivot industries or job roles.
25% – I’m job hunting
11% – I’m going to pursue a new college degree
22% – I’m going to learn a trade and/or skill (outside of a college degree)
15% – I’m going to travel
11% – I’m going to be a stay-at-home parent and/or caregiver
16% – Unsure at this time
1% – Other
Not everyone is in a financial or personal situation where they can leverage a layoff into an opportunity. In such instances where an individual can’t take the time to acquire new trade skills or return to school, it’s necessary to utilize the resources available through recruiters, employment agencies, or even the employment search resources provided by the previous employer to navigate the fallout of a layoff successfully. While there’s uncertainty in the economy driving many organizations to resort to layoffs to control costs, the opportunities the new economy has afforded other businesses to open their doors to job seekers.
Struggling to Survive a Layoff in 2022? Transform Tragedy into Opportunity with UpCity
How a person responds to a layoff is often personal and extremely dependent upon the individual’s existing skill set and how existing opportunities might support or challenge their goals and work-life balance requirements. For some, a layoff can be a life-changing push in the right direction to achieve their dreams of taking on a whole new set of skills, while for others it can be a financially challenging undertaking requiring an immediate path back into the workforce.
If you’ve recently been laid off and find yourself reading this article, we hope we’ve provided some strategies that help you find your footing and successfully find an opportunity that meets your needs. If you’re a tech worker and you’re wondering if your firm is contemplating a layoff, we hope this has provided you with the necessary insight to prepare for what’s to come. Whichever journey you might be on, we here at UpCity don’t want you to feel as if you have to navigate this journey alone. If you don’t already have a recruiter or agency, you can find an IT staffing agency in our UpCity marketplace to help you align your skills with a role that’s right for you.
UpCity’s Survey Method
UpCity used Pollfish to survey 600 recently laid-off U.S. tech workers.
Forty percent of the respondents are 25-34 years old, followed by 35-44 (31%), 18-24 (19%), 45-54 (8%), and 54+ (2%).
Fifty-nine percent of the respondents are male and forty-one percent are female.