2022 Tech Bust
The 2022 Tech Bust, as I'm coining it, is getting worse as we start 2023. Large companies are laying off large numbers of people, but what's more concerning is that the percentage of people laid off within a company is very large. Some companies are laying off 50-100% of their staff.
In my current position, I'm invited to a lot of demos from security vendors (most cold call, some warm handoff). Their products often look slick but they are devoid of actually fixing security issues; what they really are is a way of collating and tracking issues, but that's all. About a year ago I realized that many of these new security startups simply wouldn't exist with free or cheap money floating around. VCs plowing money into whatever looks interesting, hoping that 1 out of every 10 or 50 startups actually makes it big. These startups survive not on customers and superior features, but rather on the seemingly endless supply of helicopter money from VC firms. And now that the tech bust has started, I'm seeing lots of small startups with 100% layoffs, closing up shop as, presumably, the era of cheap money has ended. Profit is suddenly king, and companies are starting to learn to pivot to a profit model rather than one founded on pure growth.
This is all very reminiscent for me. I started my career in the tech industry right as the Dotcom bubble burst. I was graduating from university in Computer Science and had just interviewed with Amazon (I bombed it, but that is a different story). Right after I get home I see the announcement that Amazon is freezing hiring and laying off something like 25% of their staff. Recall that Amazon was tiny at that time, still basically just a bookseller and not the behemoth it is today.
The Dotcom bubble bursting came at an inopportune time for me, but it did help elucidate what I had been noticing for the previous two years in my undergraduate program. Once I got into 3rd and 4th year, I started to notice more people entering the Computer Science program that seemingly had no understanding of computers and no interest in the art of software development. They would talk about RAM capacity in terms of HDD capacity. Some wouldn't even know what the internal components of a computer are. And some could code their way out of anything, but they were able to pass exams and lab assignments. I couldn't figure it out. I didn't have the wisdom and frame of reference to see what was happening.
What was happening was that sharks had entered the waters, attracted by blood in the water. People were entering Computer Science programs because there were vast sums of easy money to be made, in the form of salary and equity, from this new-found idea of Internet-connected companies (what was to be eventually known as the tech industry). These people I would meet as student came from various walks of life, and various other programs (art history, etc) that normally had little to no chance of financial success, and then jumped into CompSci because these tech companies were slurping up anyone with a pulse. Some were passionate about their work. Some didn't care to learn the intricacies of how computers work or can be made performant—thats someone else's job.
Now, I don't entirely blame people for making this type of career change or taking advantage of an opportunity. I don't blame hungry sharks arriving at the smell of blood, looking for an easy meal (blood indicates an animal is hurt, and therefore easier to catch). What bothered me was that there was no interest in the underlying science of it all. It was just about money. When that money dries up, so do the people, just like how sharks don't stick around for long when the blood runs out.
So now that the layoffs are happening, I'm saddened that so many thousands of people are losing their jobs. My hope is that the tech industry uses this opportunity to reset itself and rid itself of the sharks that came only for an easy meal. That the diehard technologists are able to regain some of their power and agency, making products and services that are focused on quality instead of what gets them rich the fastest, at the end user's expense.
Or, as we all learned from the COVID pandemic, people will forget and revert back to the lowest energy state, doomed to repeat history again and telling themselves, "nobody could have ever foreseen this tragedy."
NB: I'll repeat again. This post is not about punching down on people that simply want to find a more financially stable job. This is about people who enter the industry looking for an easy path to riches, not caring about technology and simply leaving a path of destruction in their wake until the money dries up, and they leave for the next boomtown.