Tech Layoffs and the Shifting Landscape of the Workforce
Over the past 18 months, the tech industry has experienced significant upheaval, with more than 170,000 tech workers in the United States losing their jobs. This trend continues into 2025, with over 74,000 layoffs recorded in the first five months alone, marking a 35% increase compared to the same period last year. Even established giants like Meta have been impacted, cutting 11,000 positions, approximately 13% of their workforce.
Impact on Programming and Salaries
The impact of these layoffs is especially alarming in fields like programming. Official data indicates that 27% of programming jobs disappeared between 2022 and 2024. This shift has led to a decline in average tech salaries, which have fallen by more than 12% nationwide. These changes have caused many tech workers to re-evaluate the industry's long-term viability.
Where Are Tech Workers Going?
Mass layoffs have triggered significant labor migration. Thousands of skilled workers are seeking opportunities outside the traditional tech sector. Some have found similar roles in smaller companies, though often with less favorable compensation. Others are switching industries, starting their own businesses, or pursuing further education.
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Rejoining smaller companies
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Switching Industries
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Entrepreneurship
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Further Education
Unemployment and Precarious Work
While the overall US unemployment rate has remained around 4.2% in the first half of 2025, the impact on tech employment is notable. While the specific unemployment rate in the tech sector was 3.4% 4% in May. Layoffs are significantly above average in tech, finance, and trucking. The reported figure doesn't fully capture the drop in entry-level hiring and the rise in freelancing or temporary contracts.
About half of those laid off managed to re-enter the labor market within six months, but the jobs they found often differed from their previous roles. Only 32% returned to tech companies, usually smaller ones, while the rest transitioned into finance, consulting, or manufacturing.
Companies Hiring Tech Talent
Despite major tech companies cutting jobs, other companies are eager to hire tech talent. Abbott, for example, has hired over 200 tech-specific employees in the past six months and plans to hire hundreds more. Studies show that approximately:
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10% of these workers move into the financial industry.
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8% join consulting firms.
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6% find opportunities in the healthcare sector.
Others are finding employment in logistics or manufacturing companies.
Buyouts and Voluntary Exit Programs
Large tech companies are increasingly using buyouts or voluntary exit programs. These strategies allow for workforce reductions without resorting to formal layoffs. Employees are offered financial compensation to voluntarily leave, helping companies avoid negative publicity. Google, Meta, and Salesforce have all adopted this practice, offering severance packages that include extra pay, extended benefits, and job placement assistance.
Rise of Self-Employment and Entrepreneurship
The decline in opportunities at major tech firms has fueled a rise in self-employment. Platforms like Upwork, Fiverr, and Toptal have become common channels for offering services in software development, data analysis, or system maintenance. Freelance work offers flexibility but lacks financial stability and traditional benefits. Some workers are also using severance pay to launch startups, often in emerging fields like educational technology, digital health, or decentralized financial services.
Transition to the Public Sector
Another trend is the transition of tech workers into the public sector, particularly in cybersecurity. Government agencies like the Department of Defense and the Cybersecurity and Infrastructure Security Agency are intensifying their hiring efforts. This shift offers greater job stability, work-life balance, and the chance to contribute to national security, though salaries are generally lower than in the private sector.
Continued Education and Reskilling
Adapting to the new landscape requires continued education. Many professionals are pursuing certifications and programs in areas like artificial intelligence. Specialized courses on platforms like Google Cloud, TensorFlow, or Python have grown in popularity. This reflects a collective effort to remain relevant in a competitive market.
Disparities in Re-Employment
The process of re-entering the job market has not been uniform. Women have faced greater challenges, with only 31% securing a new job within three months compared to 38% of men. Mid-career professionals also encounter more difficulties due to perceptions of outdated skills. Recent graduates face a restrictive job market with entry-level openings down 50% since 2023. The unemployment rate for college graduates this summer is at 6%, nearly 2% higher than the national average.
Segmented Tech Job Market
The tech job market is becoming increasingly segmented. There is high demand for experts in AI, systems architecture, automation, and data analytics, but access to entry-level and generalist positions is narrowing. This divide is also reflected in salaries, with senior professionals continuing to earn high salaries while average wages decline.
Challenges and Future Needs
The top tech companies are facing hiring freezes and layoffs due to cost-cutting measures. This presents challenges for workers, educational institutions, and policymakers. There is a need to promote reskilling programs, incentives for hiring new talent, and social protection schemes for independent workers. Transparency in layoff and hiring processes, as well as mechanisms for labor mobility, are also essential.
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