I Spent 8 Weeks Researching the 2024 Tech Job Market

Summary

This video explores the current tech job market, analyzing hiring trends, layoffs, and compensation amidst economic uncertainty. It offers insights from industry veterans, real-life success stories, and actionable lessons for tech professionals to navigate the volatile market, emphasizing adaptability, skill development, and strategic career moves.

Takeaways

• 📈 Tech jobs and stocks have experienced ups and downs, with a recent trend of layoffs causing concern among tech workers.
• 🧳 The tech industry has a history of significant booms and busts, with the dot-com bubble in 2000 being a notable example.
• 💼 Personal stories, like Ethan Evans', demonstrate that even in tough times, perseverance can lead to significant career growth.
• 📊 Market fluctuations have been frequent, with pullbacks in 2015, 2018, and 2020, but each time the market has rebounded to new heights.
• 💹 The US Federal Reserve's decision to raise interest rates in 2022 impacted tech stocks, leading to a slowdown in hiring and an increase in layoffs.
• 🔍 Tech companies are focusing on operating more efficiently, with leaders like Meta and Google indicating a trend towards leaner organizations.
• 📉 Despite a dip in startup employment and tech job openings, the situation is not unprecedented, and the market has shown signs of recovery.
• 🤖 AI and deep tech sectors have been more resilient to the recent downturn, with hiring in these areas not slowing down as much as in other tech industries.
• 💼 Tech professionals should prepare for a bumpy ride and position themselves in areas of high demand, developing skills that will be valuable in the evolving market.
• 💰 Compensation, especially for entry-level roles, took a hit in 2022, but equity incentives (though initially reduced) are showing signs of recovery.
• 🏢 The tech job market is seeing a shift towards individual contributor roles, with leadership positions being redefined to focus more on technical skills.

Q & A

What is the current state of the tech job market according to the script?

The tech job market is experiencing a roller coaster with stocks and jobs up, layoffs down, and AI software engineers causing concern among tech workers. There is a 60% chance of a broad recession, and the market has seen significant changes over the past 8 weeks.

How long did it take for the tech industry to recover from the 2000 tech boom and bust?

It took the tech industry, adjusted for inflation, a staggering 18 years to recover from the 2000 tech boom and bust, especially with the 2008 recession hitting soon after.

What is Ethan Evans' story and how does it provide hope for those in the current tech market?

Ethan Evans was laid off from his engineering job in 2003 with a new baby and little savings. He had to take a less than ideal job that required him to move, but it turned out better than he could have imagined, as he later became a VP of engineering at Amazon during their biggest growth years. His story provides hope that even in a tough market, the right perspective and strategies can lead to success.

Why did the tech industry experience a downfall in 2022?

The downfall was triggered in March 2022 when the US Federal Reserve started raising interest rates to slow inflation. As tech stocks are valued on future growth, higher interest rates caused valuations to drop, making it expensive for companies to get money from investors or lenders, leading to slowed hiring and layoffs.

What are the implications of the current tech market for tech professionals?

Tech professionals need to understand the impact of interest rates on the industry and be prepared for both potential growth opportunities with AI and the possibility of becoming slow growth giants. They should position themselves in the right areas and develop skills that will be in high demand.

What trends have been observed in the tech job market over the past two years?

There has been a dip in startup employment, with a significant number of tech workers let go and open jobs dropping by as much as 2/3. However, the new hire rate in 2023 was similar to that in 2019, indicating that while the market has slowed, it's not in uncharted territory.

How has the compensation landscape changed for tech professionals?

Base salaries dipped a few percent in aggregate, but entry-level roles were hit harder, with up to a 25% decrease. Equity grants dropped as much as 37% but have started to bounce back. However, the value of equity has been affected by valuation declines across tech companies.

What advice is given to tech professionals regarding the pursuit of AI roles?

Tech professionals are advised not to chase only AI-specific jobs but to develop skills and a mindset to work effectively with AI when it arrives in their domain. They should focus on staying close to deep tech or the money in their next role.

What is the current sentiment regarding remote work in tech companies?

Some leaders, like Zuckerberg, have cited data showing that remote workers had worse performance than in-office workers. However, smaller companies and startups were still hiring more remote workers until recently, with hybrid work likely becoming the standard norm.

What are the five lessons that tech employees should learn during this job market?

The five lessons are: 1) Play the long game, considering the tech industry's resilience and adaptability; 2) Prepare for AI integration rather than chasing AI-specific jobs; 3) Hustle hard in the job market with high volumes of applications and personal outreach; 4) Be cautious about startup equity, considering the risks and valuations; 5) Understand that the grass isn't always greener, making career moves based on a holistic assessment rather than prestige.

How will AI impact the tech job market in the long term?

AI will have a dual impact: accelerating the economic and societal impact of tech, leading to more industry and job growth, while also making companies more efficient and potentially reducing the need for as many workers for the same output. New roles will be created to fill gaps between human and AI capabilities.

Outlines

00:00

📈 Tech Market Volatility and Career Insights

The script begins by addressing the current fluctuations in tech jobs and stocks, with a focus on the impact of AI on the workforce. The speaker shares personal research and conversations with industry leaders to provide a comprehensive view of the tech job market's state. Historical context is given, highlighting the tech boom and bust of 2000 and the subsequent recovery period. A personal story of Ethan Evans, who faced a layoff but eventually thrived, is shared to inspire hope. The discussion then moves to the effects of the Federal Reserve's interest rate hikes on tech valuations and hiring, leading to layoffs. The speaker emphasizes the importance of understanding these market dynamics and adapting to them, suggesting that tech professionals should position themselves in high-demand areas and develop relevant skills.

05:01

📉 Tech Job Market Shifts and Strategic Positioning

This paragraph delves into the changes in the tech job market over the past two years, noting a significant dip in startup employment and open tech jobs. However, it points out that the new hire rate in 2023 was similar to that of 2019, indicating that the market, while slowed, is not in uncharted territory. The speaker discusses the fear among employees to leave their jobs due to instability and the increased likelihood of entry-level employees being laid off. The importance of being in the right sectors, such as deep tech, is stressed, as these areas have experienced less slowdown in hiring. The paragraph concludes with a look ahead to 2024, noting a decrease in layoffs but acknowledging the ongoing uncertainty and the need for tech professionals to be prepared for various scenarios.

10:03

💼 Navigating the Tech Job Market: Adaptation and Strategy

The final paragraph provides a strategic outlook for tech professionals in the current job market. It outlines three significant shifts: the move towards individual contributor roles, changes in compensation structures, and the resilience of AI and deep tech sectors. The speaker advises on the importance of long-term career planning, the inevitability of AI integration into tech roles, and the need for hard work and networking in the job search. Additionally, the paragraph warns against overvaluing startup equity and advises a balanced view of the grass being greener on the other side, whether in big tech or startups. The speaker concludes with lessons on career agility, the potential of AI to reshape job roles, and the importance of building a robust career over decades, not just focusing on the immediate year or two.

Keywords

💡Tech jobs

Tech jobs refer to employment opportunities within the technology sector, typically involving roles such as software engineering, data analysis, and product management. In the video, the discussion revolves around the fluctuating nature of tech jobs, with a focus on recent trends like increased layoffs and hiring freezes, indicating a significant impact on the tech workforce.

💡Recession

A recession is a period of negative economic growth that lasts for at least two consecutive quarters. The script mentions a 60% chance of a broad recession, which is a major concern for tech professionals as it could lead to job losses and reduced opportunities within the tech industry.

💡AI software engineer

An AI software engineer is a professional who develops and maintains software applications that incorporate artificial intelligence technologies. The script highlights the emergence of the first AI software engineer as a potential cause of concern for tech workers, suggesting that automation and AI advancements might disrupt traditional tech roles.

💡Hiring trends

Hiring trends refer to the patterns and changes in the recruitment and employment practices of companies. The video discusses how hiring trends in the tech industry have been affected by economic factors, with a notable slowdown in hiring and an increase in layoffs, reflecting a shift in the job market dynamics.

💡Layoffs

Layoffs involve the termination of employment for a group of workers, often due to economic downturns or company restructuring. The script frequently mentions layoffs, particularly in the tech sector, as a significant issue affecting tech professionals, with examples of large-scale layoffs at major tech companies like Twitter and Meta.

💡Compensation

Compensation in the context of employment refers to the total remuneration received by an employee, including salary, bonuses, and equity. The video delves into compensation trends in the tech industry, noting changes in salary levels and equity grants, which are crucial for understanding the overall value of tech jobs.

💡Equity

Equity in the context of employment typically refers to shares or stock options granted to employees, often as part of their compensation package. The script discusses the impact of equity on tech workers, especially in startups, where the value of equity can fluctuate significantly and affect employees' overall compensation.

💡Interest rates

Interest rates are the cost of borrowing money and are set by central banks. The video explains how changes in interest rates can affect tech companies' valuations and investment, leading to a ripple effect on hiring practices and the tech industry's growth.

💡Remote work

Remote work refers to the practice of working from a location outside the traditional office, often from home. The script touches on the debate around remote work, citing data that suggests remote workers may have worse performance compared to in-office workers, and how this might influence future work arrangements in the tech industry.

💡Deep Tech

Deep Tech refers to advanced, cutting-edge technologies that are often at the forefront of innovation, such as artificial intelligence, robotics, and biotechnology. The video mentions deep tech sectors as areas where hiring and growth have remained relatively stable, despite broader economic fluctuations.

💡IPO

An IPO, or Initial Public Offering, is the process by which a private company goes public by offering its shares to be traded on a stock exchange. The script discusses the impact of IPOs on the tech industry, particularly how they can provide liquidity for startup employees and investors, but also notes the challenges and delays in recent years.

Highlights

Tech jobs and stocks are up while layoffs are down, indicating a shift in the tech industry.

The first AI software engineer is causing concern among tech workers about job security.

There is a 60% chance of a broad recession, which could impact the tech job market.

Analysis of data and conversations with senior leaders reveal insights into the current tech job market.

Historical context shows the tech industry's past boom and bust cycles, with recovery taking up to 18 years.

Ethan Evans' story of being laid off in 2003 and eventually becoming a VP at Amazon offers hope for those facing layoffs.

Tech veterans have been cautious due to past experiences, but the market has consistently recovered.

The US Federal Reserve's interest rate hikes in March 2022 triggered a downturn in tech stocks and hiring.

Tech stocks are valued on future growth, and higher interest rates can impact these valuations.

Meta and Google have indicated that slow hiring and occasional layoffs will continue as they aim for more efficient growth.

Tech workers need to be prepared for both growth opportunities and potential layoffs in the industry.

Startup employment saw its first dip in over 5 years in 2023, with significant layoffs and reduced open jobs.

Despite market slowdowns, the tech job market is not in uncharted territory compared to previous years.

Non-engineering startup roles were cut first, emphasizing the importance of engineering roles in maintaining products.

January 2024 saw another round of mass layoffs, but the impact was less severe than in January 2023.

Tech professionals should be aware of the three clear shifts affecting employees: more individual contributor roles, compensation dips, and AI and deep tech hiring remaining strong.

Leaders are becoming individual contributors, and tech professionals should consider focusing on technical skills.

Compensation took a dip in 2022, with equity grants dropping significantly, but salaries started growing again in 2024.

AI and deep tech hiring didn't slow down as much as other software-heavy industries, indicating a continued demand in these areas.

Remote work trends are shifting, with some companies preferring in-office workers, but startups still hire remote workers.

Tech professionals should learn five key lessons during this job market: play the long game, prepare for AI integration, hustle hard in your job, be cautious with startup equity, and understand that the grass isn't always greener.

AI's impact on the tech job market will likely lead to substantial growth, but also efficiency gains that could reduce the need for certain roles.

Transcripts

tech jobs and stocks are up Le offs are

down and the first AI software engineer

is spooking Tech workers all well

there's a 60% chance of a broad

recession as a tech professional you

might be wondering what this means for

your career and that's why I dove deep

into the tech job market for you over

the past 8 weeks I analyzed data spoke

with senior leaders and I worked with

actual candidates in the job search

trenches what I discovered will help you

understand the roller coaster we're on

where we're heading and Five Lessons

every Tech professional like you should

take away from the current market we'll

dive deep into hiring layoff and

compensation data trends and hopefully

by the end of this video you'll have

some clear lessons to take action on but

first I wanted to get you some

historical context so I spoke with the

senior leaders who have worked in the

industry for over 30 years to get a

better understanding of the tech

industry's pass as a senior director

with over a decade of experience I still

only have a limited view of the history

and what they told me shouldn't surprise

you if you think this was bad the

biggest Tech boom in bust was actually

way back in 2000 and it took inflation

adjusted markets a staggering 18 years

to really recover especially with the

2008 recession hit soon after now for

those of you who actually hurting in

today's market I want to share a story

that might give you some hope this is

Ethan Evans he was laid off from his

engineering job in 2003 with a new baby

a stay-at-home wife and little savings

early in his career he had to settle for

a less than ideal job that required him

to move but things actually worked out

for Ethan way better than he could have

imagined he went on to become a VP of

engineering at Amazon during their

biggest growth years Ethan's story

hopefully gives you some perspective on

the situation today the road ahead might

be bumpy but the right perspective

mindset and strategies you can come out

on top now that awful decade and a half

made these Tech veterans Cry Wolf quite

a few times if you look at the inflation

adjusted NASDAQ charts you'll see

pullbacks in 2015 2018 and then of

course 2020 and that spooked them into

calling another tech job recession every

few years but there wasn't a job

recession the market came back and back

and back again roaring to new heights

each time in fact 2021 was the biggest

boom of all with hiring and compensation

at an all-time high you might have

experienced this yourself multiple

offers and top candidates gain two to

three times the historical averages it

was a tech workers dream come true then

came the fall changing consumer Behavior

after lockdowns caused advertising and

consumer Tech to dip the real trigger

for the downfall was in March 2022 when

the US Federal Reserve started raising

interest rates to slow inflation as a

tech professional it's crucial to

understand how this impacts the industry

tech stocks are valued on their future

growth and interest rates discount that

growth so when interest rates went up

valuations started dropping from

all-time highs as became expensive to

get money from investors or lenders

companies had to slow hiring with many

starting layoffs in early 2022 and then

Elon bought Twitter and he laid off over

80% of its staff showing that deep cuts

are possible Zuckerberg knocked over the

first of the Fang layup dominoes at meta

leading even Google to layoff more

people than they ever had in their

history both Zuckerberg at meta and

Sundar at Google have said that slow

hiring and occasional layoffs will

continue as they believe they can grow

much more efficiently Zuckerberg

outright said higher interest rates lead

to Theon economy running leaner more

geopolitical instability leads to more

volatility and increased regulation

leads to slower growth and increased

costs of innovation given this Outlook

we'll need to operate more efficiently

than our previous headcount reduction

and this is coming from the two

companies who led the way in growing

both Tech hiring and compensation since

the early 2000s what is really happening

though is that they're entering a time

of uncertainty there is a huge

opportunity for them to ride another

major growth wave with AI but there's

also a path for them to become just

another slow growth giant like path

Cycles as a tech worker this means you

need to be prepared for both scenarios

when these companies strike oil or feel

threatened in a specific area they will

eventually need to hire furiously even

if that means laying off in other areas

of the business that aren't the cash

cows or the new area that they're trying

to win in your job is position yourself

in the right areas and develop the

skills that will be in high demand so

what specifically has changed in the job

market over the past 2 years in 2023 CA

which is used by all the top startups as

their Equity platform reported the first

dip in startup employment in over 5

years leops peaked in January 2023 with

trup reporting over 108,000 Tech workers

let go that month while open jobs in

Tech dropped by as much as 2/3 while new

startup highers dropped 50% in 2023 but

here is an interesting observation the

new higher rate was actually about the

same in 2019 as in 2023 this suggests

that while the market has slowed down

from the crazy Heights of 2021 we're not

in Uncharted Territory and if you look

at the dips and total startup headcount

they're not nearly as dramatic as the

massive growth seen in the past few

years so what does this actually mean

for you people still have jobs but the

Dynamics have shifted employees became

scared to leave their unsteady jobs

after seeing one out of four of their

colleagues hired in 2022 not even

lasting a year a 43% increase from the

previous year that's a scary stat and it

might make you think twice about jumping

ship right now plus entry level

employees were 25% more likely to cut so

if you're just starting out in your Tech

Career you need to be more cautious and

make sure you're indispensable another

Trend you'll notice is that

non-engineering startup roles were cut

first which makes sense as engineering

roles are NE Neary to maintain and build

products this is especially true in the

Deep Tech sectors fast forward to

January 2024 and we saw another round of

mass layoffs about 60% lower though than

January 2023 but it's still significant

but here's the thing we knew this was

coming some big Tech Executives I talked

to in late 2023 said that they would be

doing layoffs to appease their Finance

departments in exchange for being able

to hire in the areas they wanted and if

you look at the data it shows that open

tech jobs actually accelerated growing

177% since the new year until just about

last week down 55% from the 2022 Peak

but nearing the 2019 levels we're not

sure where this will head but it's much

better today than it was a year ago

meanwhile big tech stocks are increasing

and private valuations are ticking back

up as investors are becoming more

hopeful with IPOs like Reddit on the

horizon after only having a couple in

the past year and a half big

Acquisitions like Adobe and figma are

also being shut down by regulators and

the percentage of startup Acquisitions

for large startups has been declining

but any of this recovery happening is

k-shaped with 2021 Darlings like firm

zoom and match curb still not recovering

and the NASDAQ small Tech index has not

bounced back as fast as the rest of

NASDAQ which is already above its 2021

all-time high so what does all this mean

for you as a tech professional let's

unpack the three clear shifts that we're

seeing that affect employees like you

shift number one leaders are becoming

individual contributors individual

contributor hires in 2023 made up 30%

more of the new hires than in 2019

though surprisingly 40% of new startup

hires were still manager level or I

personally have seen many of my manager

and director friends taking on principal

or staff level IC roles this could be an

opportunity for you to level up your

technical skills and make a bigger

impact without necessarily managing

people and although it's not a people

management position meta has gone as far

as eliminating the technical program

manager role hinting that it wants to

get rid of anything that could be

considered red tape Zuck himself said

part of our work will involve removing

jobs and that will be in service of

building a leaner more technical company

so if you're in a TPM or project manager

type role it's time to start thinking

about how you can pivot your skills to

get closer to the technical the product

or the business decisions and number two

most compensation took a dip after a

runup in 2022 base salaries dipped only

a couple of percent in aggregate but

entry level roles were hit up to 25%

last year if you're just starting out

this might be a tough pill to swallow

but here's some good news eii salaries

continued to rise and most salaries have

started growing again in 2024 however

Equity grants dropped as much as 37% and

only just started to bounce back and

that's before the valuation declines

across Tech that means if you're a

startup employee you got a smaller slice

of an increasingly shrinking or in most

cases disappearing Pie as IPOs became a

distant memory if you look at levels to

FYI data for an Amazon SD level two

engineer you see a downtrend in total

compensation but you also see since late

last year there's been a return of the

top of band offers being given out if

the equity news wasn't bad enough as

startups hit record shutdown rates and

following valuations fewer employees

exercised their stock options and many

of those who did were left with worth

Equity even though they paid for them

but as public stocks rebounded startup

valuation started ticking back up and

employees became more hopeful for IPOs

after reddit's debut employees are

exercising again at similar levels to in

2019 one in five companies though gave

employees more than the 90-day window to

exercise after leaving but it's honestly

crazy that the window to pay for or lose

your high-risk Equity is only 3 months

to begin with also some startups who

dropping valuations repic their options

grants to make them more aligned with

the new value of the company but I found

in coaching candidates through salary

negotiations that tons of startups were

still overvaluing their Equity up to

five times what investors would give

them if they raised again shift number

three Ai and deep Tech hiring didn't

slow down as much as software heavy

Industries like edtech or gaming and of

course if you were part of open AI or

Nvidia during all this great for you

your Equity grants are worth many times

more than they were before and as the

valuation skyrocketed you're probably

rich now but for a lot of those Tech

workers who are laid off they're

actually starting up new AI startups

many will go out of business as with all

sector booms but more jobs giving

workers valuable experience in the new

area are now available you might be

wondering what about remote work well

Zuck and other leaders have cited data

showing that remote workers had worse

performance than in-office workers but

smaller companies and startups were

still hiring more out ofate workers

until just the past few months things

will start to stabilize and hybrid work

with just a few days in office is

probably going to become the standard

Norm now this may all seem like Doom and

Gloom but for some perspective if you

zoom out we're actually still at near

all time highs in compensation in jobs

in Tech but people don't think in

absolutes they only think about the

relative loss and part that's

understandable you set up your life and

your expectations around continued

growth and stability so here are Five

Lessons All Tech employees should learn

during this job market number one play

the long game the tech industry has seen

so many dramatic ups and downs that you

shouldn't be surprised by another one

look at Ethan's story he faced a layoff

during a tough time in the industry and

in his life but he bounced back stronger

than ever eventually becoming a VP at

Amazon the tech industry is resilient

and even with AI shaking things up there

will always be new opportunities for

those who are adaptable and willing to

learn you need to make career decisions

with a long-term perspective so pick a

company where you'll be happy even if

the business or role doesn't turn out

well in the next year or two make sure

you're still getting skills and stories

that will pay off long-term in your

career even if you have to move on

lesson number two you don't need to run

to AI it will come to you but you should

be preparing AI is going to make its way

into most tech roles eventually so

instead of chasing after only AI

specific jobs focus on developing the

skills and mindset to work effectively

with AI when it does arrive in your

domain A good rule of thumb is to either

stay close to the Deep Tech or close to

the money in your next role and if you

are in a technical role either get more

technical or learn to work and speak

product and business lesson number three

Hustle Hard in your job the market is

still really rough right now so you're

going to need to apply at high volumes

with more prep and more personal

Outreach for referrals and with open

tech jobs still down over 50% from

alltime highs the competition is fierce

to stand out you're going to need to be

proactive apply to a larger number of

companies tailor your applications and

leverage your network for referrals it's

going to take more effort but it will

pay off lesson number four don't get

blinded by startup Equity during the

recent downturn many startup employees

saw their Equity become worthless in

fact only about 7% of Sir C or later

startups pay off much Equity to

employees and many startups are still

overvaluing their equity and offer

grants when EV valuing Equity offers

carefully assess how the company is

valuing the Grant and make sure that

they take into account the possibility

of low valuation financing rounds or a

longer Runway until an exit like an IPO

lesson number five the grass isn't

always greener I see tons of people in

big Tech angry about lays and jumping

over to startups and a lot of people in

startups angry about their Equity being

worthless and wanting to go to the

stability and liquid compensation to Big

Tech and it can be tempting but remember

you're probably trading one problem set

for another one if you're going to

startups you can see by the data the Ure

Equity might not be worth much and stups

have laid off more people than the

established companies like Google just

up into to recent times Google hasn't

had many layoffs in its few decades

meanwhile startups are shutting down

laying off people and struggling with

their business every single year even

during boom times and still trying to

figure out how to even treat employees

well on the flip side jumping to Big

Tech isn't a guarantee of more stability

anymore nothing's going to be perfect so

make career moves based on a holistic

assessment of the growth opportunities

the learning potential and the culture

fit not just hyper Prestige and make

sure it's going to work out for you

whether or not the company or your role

is going to work out in 1 to two years

cuz you don't know what's going to

happen make sure you're building

achievements and success stories and

you're getting new skills in a new area

and some of you might be thinking what

about AI eliminating all these jobs

while AI is going to be used to increase

productivity in Tech workers for sure

we've already seen meta and Google

building internal tools for coding and

other functions but the layoffs we've

seen recently aren't due to Ai and the

leaders of these tech companies have

said so themselves instead ai's impact

will actually be on the longer term

hiring growth there are two

counteracting forces from AI on the tech

job Market's future number one AI will

accelerate the economic and societal

impact of tech once again leading to

more industry and job growth but number

two AI will also make companies more

efficient no longer needing as many

workers for the same type of output in

my opinion the net result is probably

going to be a substantial growth in the

tech industry but many roles like

customer support will be totally

reinvented other organizational roles or

lower level analytical QA encoding roles

will likely be automated quite a bit

however new roles will also be created

to fill in the gaps between human and AI

capabilities so you have to stay Nimble

and remember that your career is

measured in decades not a single year

and now that you've learned these

lessons you probably want more tips on

how to find a job in this economy so

check out my next video