After big tech layoffs, Silicon Valley may have lost its monopoly on workers

After a year defined by mass layoffs among Silicon Valley giants, technology workers are trading the prospect of high-growth equity and household-name employment for something more stable.

According to 2023 data from tech interviewing platform Karat, non-tech enterprise companies successfully hire nine out of every 10 candidates they extend offers to, whereas growth-focused big tech companies (such as those in and around the FAANG ecosystem) hire just two-thirds of those they extend offers to.

This gap has grown in recent years. In 2020, hypergrowth tech secured more candidates, but economic volatility and the prevalence of tech endeavors in a range of industries have flipped the script.

“Just as there was a flight to safety for investors, there has been the same one for candidates,” said Jeff Spector, president and co-founder of Karat. “Candidates are trading off upside for safety.”

This flight to safety makes sense given prolonged high interest rates, dramatic increases in overall cost of living and layoffs that have — in a sense — punctured the vision of tech hubs like Silicon Valley and Seattle as a place where tech talent can not only get their start but also grow in their career over the long-term without job hopping. “The veil of invincibility has been pierced,” Spector said.

According to tech layoff tracker Layoffs.FYI, 584 tech companies laid off people in the first quarter of 2023. That number decreased over the course of the year, but it was much higher than in 2022, and the wound remains open. Tech companies like Google, Meta, Microsoft, Amazon, Salesforce and more laid off 6% to 13% of their company. In some cases, like that of X (formerly Twitter), half of the company lost employment.

This week, Google announced another round of layoffs hitting engineering and hardware teams; Amazon laid off staffers in its Twitch, Prime Video and MGM Studios businesses; and social media company Discord cut 17% of its staff.

It’s more than the numbers that feed the notion of disillusionment. One FAANG employee wrote on a Reddit thread, “I honestly care more about money and promotion to the next level than about the work I’m currently doing. […] I feel like changing companies is a better path to getting what I want rather than aiming for a promotion that may or may not happen.”

According to Dice’s 2023 Tech Sentiment Report, 60% of tech workers in general are interested in leaving their jobs in 2024, which is up from 52% the year prior. This poses a major competitive opportunity for non-tech enterprises to attract tech talent.

Non-tech enterprises are inviting talent with the promise of stable employment that prioritizes cash over equity that may not retain its value in the near term. Plus, they’re not pigeonholed to tech hubs, enabling workers to live in more affordable cities and reduce commute times.

A 2023 report from CBRE says non-tech companies already secure about 60% of tech talent, and that they haven’t been part of a major layoff since 2022 (while tech companies account for nearly a third of the 700,000 global workforce layoffs by U.S. employers).

According to Art Zeile, CEO of tech careers marketplace Dice, tech workers are most in demand in the aerospace, consulting, health care, financial services and education industries. Zeile says it’s in spaces like these — non-tech enterprises with major tech branches — that tech workers can find better work-life balance and more stability than the tech leaders can provide.

Despite the ongoing shift away from big tech, there are a couple of features that high-growth companies tend to provide that non-tech enterprises historically lag in: remote work flexibility and tech athleticism (or the culture of enabling creative tinkering and innovation). Despite the benefit of stability in the current economic climate, non-tech enterprises must still adapt to retain long-term interest given what top tech talent is used to.

Spector says there are benefits to less innovation-focused side quests, namely that tech workers get to see more projects come to life. “There are a lot of moonshot projects, a lot of experimental projects,” Spector said about big tech organizations. In corporate America outside of big tech, he said, “There is more of a dedication to making sure that the project gets fulfilled.”

Ultimately, Zeile says recent layoffs have induced a jarring disruption in two decades of growth in big tech. As a result, “the idea of stability is much more part of the conversation today,” he said.  

In his work in the tech hiring space, Spector has noticed that big tech is moving towards fulfilling more international contracts in places like India, with enterprises moving towards domestic full-time talent. This, he says, is a bit of a role reversal based on what we’ve historically seen in these two worlds. “Everybody’s starting to move into everybody else’s space,” Spector said, adding that the tech talent market will continue to get more competitive as geographical wage gaps begin to close.

With artificial intelligence increasingly important in job roles of all kinds — technology especially — Zeile says we’re seeing more candidates moving in the direction of making sure they have the right skills to compete in current and future job markets. GitHub’s 2023 Octoverse report states that 92% of all developers on the platform are using or experimenting with AI coding tools. That’s just one example of the technology’s infiltration into the minds of tech professionals.

AI or not, hiring trends show that tech workers are reshaping what it means to be successful as a tech professional, casting aside earlier delineations of working for one of the biggest tech companies in the world as the extent of what it means to thrive in the space.

But, Spector said, “Memories are short.” He can’t say for sure whether this trend will last, but at the moment, many tech workers have an opportunity to secure greater stability while still doing what they do best.