Job market remains steady despite big-tech layoffs

By Jo Early

Powerhouse tech companies announced waves of layoffs in Jan. 2023 including Google, Amazon and Meta. Over 68,500 jobs have been cut as companies seek to curb expenses ahead of economic concerns.

Destinee Tidwell is an Amarillo resident hoping to break into the tech industry. She is currently studying coding and app development.

Tidwell said she sought to transition into tech for “a lot of reasons but mainly job security.” The industry has been expanding steadily for over a decade, and many companies saw a hiring boom as the pandemic led to a spike in e-commerce. Now as the pandemic is waning, many companies are scaling back.

Budgets have become tighter due to plummeting tech stocks, as rising interest rates make treasury bonds a more appealing option to investors. The Federal Reserve raises interest rates to combat inflation.

“As they move interest rates up, it becomes more costly for you to use your money because you’re incentivized to save it,” Dr. Neil Meredith, Associate Professor of Economics and Dana Professor of Business said. “The idea is to get less money circulating through the economy, to perhaps tamp down some of the aggregate demand that will put pressure on prices to rise.”

The tech industry hasn’t faced this level of layoffs since the dot-com bust of the 2000s. As with the recent layoffs, rising interest rates and a lack of investors played a factor in the industry’s decline.

“I think tech companies now are taking a look at themselves and saying, okay, what do we want our strategic goals to be for the next few years?” Meredith said. “How are we going to get there? What size of labor force do we need to do this?”

Despite the extreme cuts, the job market is holding steady, and the skills of employees who were laid-off are in high demand in other job sectors.

“We’re sort of in a weird situation where we might actually have what the Federal Reserve is calling like a soft landing, where the labor market doesn’t actually really take that much of a hit,” Meredith said. “There’s still a lot of demand for labor, even with interest rates rising.”

Flexible technical skills can also be utilized at smaller companies or in developing tech for other industries, according to Tidwell.
“Almost every single person you pass of every age has a cell phone, and businesses are always needing people to develop applications,” Tidwell said. “Most people don’t use websites much anymore, even for companies like Amazon and Google. Most likely, you’ll have their application on your phone.”

Graduating WT students may need to adjust their plans to weather the current economic climate.

“I would say to be flexible and adaptable,” Meredith said. “Your first job may not be your ideal position but work your way through. It may mean having to be more flexible about where you locate yourself.”