Big Tech Is Laying Off Workers: Is Your Job Next?

Image by Mohamed Hassan @ Pixabay

For most of the FIRE movement’s existence, the single largest career type that made up the movement was engineers: specifically, software engineers.

The reason for this is that the modern FIRE movement’s explosion in popularity happened to coincide with a similar explosion of growth in the tech sector. From early 2000 to now, the world went from a personal computer being a 20 pound box of metal sitting on a desk to something so small and portable that we can fit it in our pocket. We also went from a typical US household owning a single computer to our current environment of multiple devices per person.

That transition takes an army of highly skilled workers, and the tech sector boomed. Salaries ballooned along with it, and perk-filled job offers promising stock options and bonuses became common. A lot of nerds starting making a lot of money.

Along the way, a small subset of those nerds thought “Hey, maybe I should save my money and invest it instead of blowing it all,” and the modern FIRE movement was born. Mr. Money Mustache was a software engineer. Both FIRECracker and I were too, as was Jeremy from GoCurryCracker. Software/computer engineering became the single most reliable and reproducible path to FIRE for the past 20 years.

Unfortunately, those days may be coming to an end.

Software engineers were the most overrepresented position in layoffs in 2023, relative to their employment, according to data requested by Vox from workforce data company Revelio Labs.

Tech companies are finally firing tech workers,

During the pandemic, the tech sector was absolutely booming. Job offers were flying left and right, salaries were going through the roof, and it was common to have multiple offers from multiple companies, and the reason was obvious. We were all stuck inside watching Netflix, playing with our phones, and ordering crap off Amazon.

Well, what goes up has to come down. It looks like the tech companies over-hired, thinking demand was going to continue to hockey-stick up and to the right forever, and are now consolidating their gains and shifting to a more sustainable growth pattern.

Another big reason was this guy:

Photo by Steve Jurvetson @ Flickr

Elon Musk famously took control of Twitter back in late 2022, then proceeded to lay off 80% of the workers there. Not only did the sky not fall, Twitter went from operating at a massive loss to projecting positive cash flow by Q3 2023.

This also gave political cover for other tech CEO’s like Mark Zuckerberg to embark on their own “Year of Efficiency.” Laying off 10%-20% of the company seems a lot more palatable when you can point at someone else and say “At least we’re not as bad as that guy.”

In return, investors have rewarded these efforts handsomely. After Meta announced a further planned headcount reduction of 10,000 workers, Wall Street cheered, sending Meta’s stock price up an eye-popping 91% so far this year alone. Because they’re getting richer the more people they fire, there’s very little incentive for these tech CEO’s to slow down anytime soon.

And finally, the big AI-powered elephant in the room: ChatGPT.

Just a few years ago, the idea of software writing software would have seemed ludicrous, but nowadays the technology has become advanced enough that it might be happening already.

Business Insider reports that software engineers are in a panic about the prospect of their jobs being replaced.

“Software engineering is a dying profession,” a Microsoft engineer wrote in a Blind post from earlier this week, titled “Face it, golden age is over.”

Software engineers are panicking about being replaced by AI, Business Insider

While I’m deeply skeptical of the idea that a tech illiterate pointy-haired manager can simply direct ChatGPT to “write me a million-dollar app, AI bot!” I do see AI being used to help software engineers be more productive, effectively acting as a super-powered code assistant. However, that does mean that companies will require less human bodies to achieve the same level of productivity.

Put it all together and the narrative that the ability to code will always guarantee employment is appearing to be no longer true.

The current bout of job instability in the tech sector is unusual in its intensity, but it’s not new. When FIRECracker was working, her job was constantly under threat of being outsourced to India. At one point, her co-workers were being informed their job was disappearing, and then asked to train their replacements before they were formally fired. And in the 2000’s, the dot-com crash caused by insane overvaluations of tech companies turned Silicon Valley into a ghost town overnight.

None of us can afford to feel comfortable with our jobs.

FIRECracker and I are constantly amazed by how easily people enter into insane amounts of mortgage debt that require you to continue working for the next 25 years. I mean sure, your boss might be patting you on the back and telling you that you’re indispensable now, but who knows what tomorrow might bring? All it takes is a change of company ownership, the emergence of a new technology, or a geopolitical event beyond your control and the ground will shift under your feet. It’s happened before and will happen again.

The only strategy that has been proven correct time and time again has been:

  1. Control your spending
  2. Build up your net worth
  3. Build a passive income

People forget that the “Retire Early” part of FIRE is completely optional. If you like your job and it’s still available to you, by all means feel free to keep working. But don’t use liking your job as an excuse to never get your financial house in order.

When FIRECracker and I were shopping for a house back in 2010, the idea of a mortgage scared the crap out of me. My plan (at the time) was to use all the pre-payment options to pay down the mortgage as quickly as possible so I could get rid of the damned thing within 5 years, and when I explained my plan to my co-workers, they laughed at me. “Why would you pay more into your mortgage than you absolutely had to?”

This is why. If I was one of these employees at seemingly invincible companies like Google or Meta facing the axe and I still had a mortgage, I’d be shitting a brick right now. Yet that’s exactly the situation thousands of tech workers are finding themselves right now, like this guy…

Being financially independent is the only way to ensure that a sudden job loss can’t destroy your life. It’s not normal to have a mortgage, and your job is never safe. The sooner everyone realizes this and starts to plan accordingly, the better off we’ll all be.

What do you think? Do you think your job is safe? Or are the recent layoffs worrying to you? Let’s hear it in the comments below!

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