The new tech industry: layoffs are just a way of life now

Working as a software engineer at any level has become risky. Layoffs due to market conditions, AI, budget issues, the list goes on-and-on… This is likely just the way things will be in tech from now on.

If you’ve been in this industry for more than a few years, you’ve felt the shift. The era of unlimited hiring budgets, wacky perks, and the assumption that good engineers would always be in demand: that era is over. What we’re experiencing isn’t just a correction; it’s a fundamental restructuring of how tech companies will likely operate moving into the future.

How Did We Get Here

For the entirety of the 2010s tech was on the rise. Companies were growing at record rates, the demand for engineering jobs seemed bottomless. The problems with over-population in tech has been a long time coming.

The 2020-2021 hiring frenzy clearly created an unsustainable bubble. Companies, flush with capital and pandemic-driven growth, hired far too aggressively. Then the post-pandemic reality hit: interest rates rose, growth slowed, and investors began to demand profitability over growth at any cost.

The result? Wave after wave of layoffs. Google, Meta, Amazon, Microsoft: even the giants aren’t immune. Smaller companies are cutting deeper, often eliminating entire teams overnight. And unlike previous downturns, this one has and interesting staying power. Companies have discovered they can run leaner, and many have no intention of returning to 2021 staffing levels.

Add AI to the mix (not because it’s replacing engineers, but because executives believe it will replace engineers). That fear alone is driving hiring freezes and headcount reductions.

Who Bears the Burden?

Junior engineers seem to be facing the harshest reality. Entry-level positions have evaporated from the job market. New grads with stellar credentials are sending hundreds of applications and hearing nothing but crickets. The “just learn to code” advice that dominated the 2010s now feels almost like a cruel joke.

Mid-level engineers thought experience would protect them. It hasn’t. When companies cut 10-20% of staff, they’re often eliminating solid, productive engineers who happened to be on the wrong team at the wrong time.

Even senior engineers aren’t safe. Yes, they have more experience and broader networks, but they’re also expensive. When CFOs look at headcount costs, senior salaries stand out. I’ve watched talented Staff and Principal engineers get laid off while trying to rationalize how this could happen to them.

The common thread? Performance often matters less than timing and luck.

The Uncomfortable Truth

We got used to tech being the safe, lucrative career choice. That security was always partly illusion, but now the illusion is shattered. Tech is still a good career (better than most), but it’s no longer the guaranteed golden ticket it once seemed.

What the industry is experiencing might just be tech growing up. Other industries have dealt with cyclical layoffs and job insecurity for decades. Maybe we’re simply catching up to that reality of how businesses operate at scale.

The engineers who will thrive aren’t necessarily the most talented. They’re the most adaptable. They build financial resilience, invest in relationships, continuously learn, and don’t anchor their identity solely to their employer.

Moving Forward

Is this sustainable? Can we build careers in an industry with such volatility? I think so, but it requires a mindset shift. We need to stop thinking of ourselves as employees and start thinking of ourselves as business owners: ones whose primary product is our skills and expertise. We’re selling our time and skills to the highest bidder.

The stability we once took for granted in our industry, likely is not coming back. But that doesn’t mean we can’t build fulfilling and enjoyable careers. It just means we need to be more intentional about how we approach them and find new opportunities.

The tech industry hasn’t stopped needing great engineers. But it’s pickier now, and the margin for complacency has disappeared. For those willing to adapt, there’s still enormous opportunity. For those hoping things will return to 2021, it’s time for a reality check.

Stay sharp. Stay connected. And keep building.