Washington state’s tech industry will continue to grow, despite layoffs – GeekWire

Technicians are going through layoffs. Without downplaying the significant impact on those directly affected, this post attempts to provide some perspective.

The chart above shows tech jobs in Washington by month1 From January 1990 to December 2022 (latest month for which ESD data are available).

Industries have cycles. In technology it has happened before, is happening now, and will certainly happen again. But technology is sure to continue to grow in the long term, and Washington is well positioned to capitalize on that future growth.

Several factors are at work now.

We are in a period of general economic stress, with reduced demand for products and services offered by technology companies. Google CEO Sundar Pichai wrote: “In order to keep pace with that growth, we hired because of economic realities that are different from the ones we are currently facing.” Reductions are inevitable.

Importantly, even after these cuts, most tech companies will still be much larger than their pre-pandemic levels. Some examples (these are global employment figures, not Washington state):

  • Salesforce announces 8,000 job cuts. In January 2020, he had 50,000 employees at Salesforce. As of October 2022, Salesforce had 80,000 employees. Even after layoffs, Salesforce’s headcount is 44% higher than it was three years ago.
  • Amazon announced 18,000 job cuts. In March 2020, Amazon had her 840,000 employees. As of September 2022, Amazon had 1,544,000 employees. Even after the layoffs, Amazon’s employee count is 82% higher than he was three years ago.2
  • Meta (Facebook) announced 11,000 job cuts. As of December 2019, Meta had 45,000 employees. Just prior to the November 2022 announcement, Meta had 87,000 employees. Even after the layoffs, Meta’s workforce is 69% more than he was three years ago.
  • Microsoft announced 10,000 job cuts (only 878 in Washington State). But Microsoft added his 40,000 jobs in the last fiscal year alone.
  • Google’s reduction of 12,000 employees worldwide has to be factored into the increase from 119,000 to 187,000 over the past three years.

Some companies are adjusting their workforces to de-emphasize certain areas and make room for growth in others. Satya Nadella, CEO of Microsoft, wrote: (Artificial intelligence is a particular focus of growth across industries.)

Jeffrey Pfeffer, a Stanford Graduate School of Business professor who has specialized in organizational behavior for more than 40 years, believes much of the workforce cuts across the tech industry are due to “social contagion,” imitative behavior. A more positive interpretation: Headcount reductions by similar companies may provide an environment conducive to making difficult business decisions that have been postponed.

The pre-pandemic peak of tech employment in Washington (above) was 150,000 in March 2020. The high water mark in September 2022 was 177,000. December 2022 had a value of 173,000. Although further cuts are likely, employment in December 2022 is 23,000 above the pre-pandemic peak and 68,000 above the number ten years ago (105,000 in December 2012).

Finally, two observations from the University of Washington:

  • Empirically, recruitment continues. We surveyed more than 100 of her students in programs who graduated in the fall semester, and their results in terms of employment do not stand out compared to students graduating in the 2021-22 academic year. (Dice currently has 1,886 “software engineer” job openings in his Seattle area alone.)
  • Student demand continues to grow. UW received 8,555 freshman applications in the fall of 2023 from students with the Paul G. Allen School as their first-choice major. This is up from her 7,587 in Fall 2022.

As mentioned earlier, the industry is cyclical. In technology it has happened before, is happening now, and will happen again. But technology will continue to grow in the long term, and Washington is well positioned to capitalize on that future growth.

1Business classifications are necessarily imprecise. There are many non-tech employees in the tech industry (especially companies headquartered here), and non-tech companies often have many tech employees. A specific example is Amazon employment is not included in the chart – ESD classifies Amazon as “Retail” rather than “Information”.

2To be fair, the cuts will focus on Amazon’s white-collar workforce, which is probably only a quarter of the total. increased significantly. For example, Amazon announced that many of its layoffs are in its human resources department. This should come as no surprise. It took Amazon 25 years to reach overall pre-pandemic workforce levels. That workforce nearly doubled over his next two years. We don’t need the level of HR staff needed to drive extraordinary post-pandemic growth.

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