Laid-off techies face ‘sense of impending doom' with job cuts at highest since dot-com crash

• With tech layoffs at their highest since the 2001 dot-com crash, the job hunt is getting harder and many in the industry are being forced to settle for pay cuts if they can find a new gig at all.
• Since the start of the year, more than 50,000 positions have been slashed at over 200 tech companies, according to tracking website Layoffs.fyi.
• CNBC spoke to a dozen recently laid-off employees about their experiences navigating the job market.

Allison Croisant, a data scientist with about a decade of experience in technology, was laid off by PayPal earlier this year, joining the masses of unemployed across her industry. Croisant has one word to describe the process of looking for a job right now: "Insane."

"Everybody else is also getting laid off," said Croisant, who lives in Omaha, Nebraska, where she worked remotely for PayPal.

Her sentiment is reflected in the numbers. Since the start of the year, more than 50,000 workers have been laid off from over 200 tech companies, according to tracking website Layoffs.fyi. It's a continuation of the predominant theme of 2023, when more than 260,000 workers across nearly 1,200 tech companies lost their jobs.

Alphabet, Amazon, Meta and Microsoft have all taken part in the downsizing this year, along with eBay, Unity Software, SAP and Cisco. Wall Street has largely cheered on the cost-cutting, sending many tech stocks to record highs on optimism that spending discipline coupled with efficiency gains from artificial intelligence will lead to rising profits. PayPal announced in January that it was eliminating 9% of its workforce, or about 2,500 jobs.

For the tens of thousands of people in Croisant's position, the path toward reemployment is daunting. All told, 2023 was the second-biggest year of cuts on record in the technology sector, behind only the dot-com crash in 2001, according to outplacement firm Challenger, Gray & Christmas. Not since the spectacular flameouts of Pets.com, eToys and Webvan have so many tech workers lost their jobs in such a short period of time.

Last month's job cut count was the highest of any February since 2009, when the financial crisis forced companies into cash preservation mode.

CNBC spoke to a dozen people who have been laid off from tech jobs in the past year or so about their experiences navigating the labor market. Some spoke on the condition that CNBC not use their names or write about the details of their situation. Taken together, they paint a picture of an increasingly competitive market with job listings that include exacting requirements for qualification and come with lower pay than their prior gigs.

It's a particularly confounding situation for software developers and data scientists, who just a couple of years ago had some of the most marketable and highly valued skills on the planet, and are now considering whether they need to exit the industry to find employment.

"The market isn't what it once was," Roger Lee, creator of Layoffs.fyi, said in an email. "To secure a new position, many salespeople and recruiters are leaving tech entirely. Even engineers are compromising — accepting roles with less stability, a tougher work environment, or lower pay and benefits."

Lee said tech salaries have "largely stagnated" in the last two years, citing data from Comprehensive.io, a compensation tracker he recently helped launch.

Croisant's job search involved applying for some positions that had racked up hundreds of applicants. She could see that data using LinkedIn's Talent Insights platform, which shows how many people are vying for an open role.

Additionally, some listings required applicants to have advanced degrees or professional experience in machine learning and artificial intelligence, a new development in Croisant's experience on the job market.

During five weeks of job hunting, Croisant said she applied to 48 openings and landed two interviews. She finally opted to accept a lower-level data analyst role and a roughly $3,000 reduction in her base pay to take a contract role starting next month at a financial technology company.

"This was an absolutely terrifying experience for me, and I'm not sure if I'll ever truly feel secure in a job again," Croisant said. "But I'm still one of the lucky ones in the end. I have friends who've been looking for months and still haven't found anything."

'It's humbling'

Krysten Powers was laid off in January from travel tech startup Flyr after two years in marketing at the company. She said navigating the current labor market is like a full-time job, "sometimes even harder."

"You're putting out resumes and getting almost immediate rejections," said Powers, who's worked in marketing for a decade. "It does take a toll on your confidence and you get this sort of imposter syndrome."

Powers lives with her husband and two kids in the small town of Natchez, Mississippi. A month before she lost her job, her family bought a new house. Powers said moving isn't an option, and she's only considering remote roles in marketing. However, she is willing to accept a pay cut.

"It's humbling for sure," she said.

The same dynamics are playing out across the industry, even for former employees of Google, which was long considered the home of Silicon Valley's elite talent.

Christopher Fong, who worked at Google from 2006 to 2015, is the founder of a group called Xoogler.co, which seeks to provide help for people laid off from the internet company. The 9-year-old organization, consisting of thousands of Google alumni and current staffers, offers peer support and hundreds of in-person events.

In January, Google eliminated several hundred positions across its hardware, central engineering and Google Assistant teams. A year earlier, the company cut 12,000 jobs, or roughly 6% of its full-time workforce. 

Fong said the "biggest challenge" today for many ex-Google employees is finding a job that maintains their previous level of pay.

Michael Kascsak, who was laid off by Google in March of last year, took a different approach to his job search.

Kascsak said he welcomed a pay cut to start as head of talent acquisition for veterinary business CityVet in January after applying for hundreds of jobs. He acknowledged that his previous employer had set exceptionally high compensation expectations. 

"I went into this knowing I had been fortunate to work at a company that paid at the top percentile and I'm a realist. I prepared myself to be flexible," said Kascsak, who lives in Austin, Texas, and previously worked in talent sourcing for Google. "I'm fine with the pay now because I'm in the environment I want to be in with great people."

Tech is a notable outlier in a labor market that's been largely steady over the past two years. Nationwide, the unemployment rate ticked up to 3.9% in February from 3.7% each of the prior three months. It's been mostly in that range since early 2022. The U.S. economy added 275,000 jobs in February, topping 200,000 for a third straight month.

Booming market for AI engineers

Sentiment indexes are mixed. Job review website Glassdoor's Employee Confidence Index, which gauges how employees feel about their employer's six-month business outlook, sank to its lowest level in February since its sentiment data first began in 2016. Among tech workers, discussions about layoffs on Glassdoor have more than quadrupled in the past two years, and were up 12% last month compared with a year earlier.

However, ZipRecruiter's Job Seeker Confidence Index has been rising since mid-2023, and increased to its highest level in the fourth quarter since the second quarter of 2022.

Even within tech, there's a vast divide in the current market. Lee of Layoffs.fyi said AI is driving a "return to rapid hiring and expansion" while layoffs continue elsewhere. Salaries for AI engineers rose 12% from the third to fourth quarter last year, and the average salary for a senior AI engineer nationally is more than $190,000, according to Comprehensive.io.

Amit Mittal has been on both sides of the employment market — previously as a hiring manager and now as a job seeker.

In November, Mittal was laid off from AI lending company Upstart, where he worked as a software engineering manager, often overseeing interviews. Mittal said he witnessed the hiring process become "a lot more demanding" as layoffs surged.

"There was a lot more pressure on us to basically raise the bar higher and higher," he said. "Somebody with a four-year experience in the past would have had a pretty good chance at getting a good job. But now they're competing against people who have six, seven, eight years of experience for the same position." 

Mittal, who's from India and has lived in the Chicago area since 2007, has lately been subject to a very different kind of pressure. Under his H-1B visa, Mittal had only 60 days from the official end of his employment to find a new job in the tech industry in order to stay in the country.

"If for four months, I have to pay my bills by driving an Uber or working at McDonald's flipping burgers, that's fine," he said. "But that mechanism doesn't exist for me."

Mittal has now successfully petitioned to obtain a separate B-2 tourist visa, giving him an extra six months to find new employment. It wasn't a cheap effort, though. He estimated he spent around $8,000 on legal and administrative costs tied to his submission.

All the while, Mittal said he's applied for about 110 jobs to no avail. He attributed the dearth of success to employers' reluctance or inability to sponsor visa holders.

"It seems like the possibilities are pretty slim right now, even though I see hundreds of postings every single day," Mittal said.

Bill Vezey was laid off by eBay in January following a 13-year career as a software engineer at the online retailer. He said he's learning the rules of the "new game," and they're much different than he remembers. 

"Attainability is not just a numbers game," said Vezey, 64, who lives in Santa Cruz, California. "It is a combination of how well you brand yourself, about your access through networking to any given position — to the hidden job market."

Vezey said he hopes to be rehired at his longtime employer and wants to remain in tech.

"I am kind of an incurable optimist, despite what 60-odd years of living have brought," he said.

Like many of those who spoke to CNBC, Powers said she spends her days tailoring her resume for openings, scanning online job boards and applying for newly posted positions. She networks by contacting a recruiter or hiring manager connected to each role, though she said some recruiters have ghosted her as quickly as they've expressed interest.

She's had a few interviews, and turned down one job offer. That position would've required her to go to an office while taking a more than 50% pay cut from her previous job. And she'd have to find child care.

"There's a sense of impending doom," Powers said. "There is a point where the money runs out and the options become really bleak."

Still, Powers said she's trying to stay optimistic, "because giving up is not going to get me a job."

— CNBC's Jennifer Elias contributed to this report.

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