I Spent 8 Weeks Researching the 2024 Tech Job Market
Summary
TLDRThis 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
📈 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.
📉 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.
💼 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.
Mindmap
Keywords
💡Tech jobs
💡Recession
💡AI software engineer
💡Hiring trends
💡Layoffs
💡Compensation
💡Equity
💡Interest rates
💡Remote work
💡Deep Tech
💡IPO
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
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