Tag: tech industry

The process of creative destruction in the tech sector allows for great leaps of innovation as startups out-manoeuvre incumbents and are, in turn, acquired in billion-dollar deals. However, this dynamism and flexibility can also come at a cost. When organisations are flush with cash and the trade winds are blowing in the right direction, developers’ high value is evident in their commensurately high salaries and attractive benefits packages as organisations build crack teams to solve hard problems. 

But when times are hard, these crack teams can begin to look like luxuries, and suddenly, a prestigiously large team may appear bloated. In hard times, organisations need to maintain profitability and ‘right-size’ their organisation. After the hiring glut during the COVID-19 pandemic, it appears that software vendors have begun to tighten their belts in the face of global financial uncertainty. Meta’s ‘year of efficiency’ has reportedly resulted in a loss of 20k jobs, a fraction of the reported 225k lost in 2023 (at the time of writing).

In this blog post, we examine how developers were affected by layoffs in the tech industry in the last 18 months, presenting findings from SlashData’s Q3 2023 Developer Nation survey.

A very substantial proportion (45%) of developers were directly or indirectly affected by these layoffs. In particular, nearly a quarter of those – and 11% of all professional developers – were themselves laid off. We’ll look more closely at just who was affected further down the post.

It seems that employers were more willing to reduce headcount than to reduce benefits – 30% of developers were either laid off or know someone who was, whilst 22% either lost salary/benefits or didn’t get a raise. This shows the depth of the cuts needed for organisations to remain profitable – redundancies save on bonuses, benefits, and overheads, in addition to salaries.

Interestingly, as a result of this situation, we find that 12% of developers are considering changing career paths. According to our survey data, Industrial IoT (21%) and VR (18%) are the hardest-hit sectors. Given that many VR developers get into the profession due to their passion and evangelism for the technology, this must be particularly distressing for them. 

Furthermore, even despite the recent AI/ML gold rush associated with recent developments in large language models (LLMs), 16% of developers involved in ML/AI projects are considering switching. Those who report translating business problems into ML/AI problems are the most likely to consider switching (24%). This might be because the answer to this question is now becoming increasingly ‘use the ChatGPT API’. To find out more about what developers think of generative AI, check out the 25th edition of our State of the Developer Nation report and our recent webinar.

Looking at the effect of company size, we can see that developers at the largest organisations – those with a thousand or more employees – were the least affected by layoffs. More specifically, 62% of them weren’t affected in any way. This demonstrates that, despite the widely-publicised layoffs from companies like Microsoft, Meta, and Google, the financial difficulties have been felt more keenly at smaller organisations. Understandably, though, 5-digit layoffs at a single company make for attention-grabbing headlines and collecting data on the wider number of smaller organisations is difficult. So here, we present this often under-reported view of how layoffs have affected developers at smaller organisations.

Much of the reporting of these layoffs has focused on large organisations’ attempts to gain efficiencies by flattening their hierarchies. We can see this reflected in our data – the negative impact of the layoffs rises with developers’ level of influence on tool purchasing decisions. 

Developers in senior roles have been hit the hardest by the negative impacts of the layoffs, proportionately, at least. Under half of the decision-makers* remain unaffected as of Q3 2023 – compared to 64% of those not involved in tool selection decisions. Furthermore, more than a third (37%) of decision-makers were either laid off themselves or knew someone else who was. Just 24% of non-decision-makers say the same. 

Decision-makers – with their commensurately higher salaries – were also nearly twice as likely as those not involved in tool selection decisions to feel the financial squeeze from the situation, with 27% experiencing reduced salaries, bonuses, and/or benefits, vs. 14% of those not involved in tool purchasing decisions.

In fact, the impact is such that decision-makers are nearly three times as likely to consider switching career paths as those who are not involved in making decisions in the tool selection process. Decision-makers at small companies (2-50 employees) are the least likely to want to switch, though – 11% say they are considering changing career paths, compared to 20% of those at larger organisations. Smaller companies likely have less red tape and flatter hierarchies anyway.

*Decision-makers are developers who say that they make the final selection decision for team/company tools, approve expenses on tools & components, or approve the overall team budget for developer tools. Influencers are those who say they are involved in tool selection decisions by making recommendations or influencing decision-makers or are responsible for specifications.

Developers’ influence and the size of the organisation they work at are not the only factors at play in whether or not they have been affected by layoffs. We also must consider developers’ skill levels. Here, we present two views that capture different aspects of developers’ level of expertise:

1. Years of experience in software development
2. Where developers learnt to code

The most experienced developers suffered the fewest ill-effects from the layoffs. No matter how you measure it, they are the least likely to have been laid off, know someone who was laid off, or to have experienced reduced salaries, bonuses and/or benefits. Subsequently, just 6% say that they are considering changing career paths. Clearly, these developers have a greater sunk cost to consider than the least experienced – those with two or fewer years under their belts – but this data demonstrates just how essential highly experienced developers are to the smooth running of an organisation.

In fact, being highly experienced appears to mitigate some of the negative effects experienced by decision-makers. For example, 68% of decision-makers with 11+ years of experience saw no negative effects from the layoffs, compared to 39% of those with 3-10 years under their belts. Although decision-makers are the most likely to have experienced negative impacts from layoffs, organisations still recognise the value of having experienced developers in key positions.

Looking at expertise from another angle – developers’ level of education, we can see that bootcamp-educated developers are at a significant disadvantage, even over those who don’t know how to code. Just 38% of bootcamp-educated developers suffered no ill effects from recent layoffs, and 43% were either laid off or know someone who was. This data indicates that:

1. Some bootcamps don’t equip developers with sufficient skills to weather storms – these developers are often the first to go, and;
2. Bootcamp-educated developers have a large network of similarly skilled friends and colleagues who also suffered from these layoffs.

As for those who don’t know how to code – whose outcomes appear better than even developers educated at a postgraduate level – we see that some roles are over-represented:

• 13% are product managers / marketers / salespeople,
• 12% are tech/engineering team leads,
• 12% are system administrators (using visual development tools to manage infrastructure),
• 11% are business analysts.

All of these roles, though vital to the software development process, don’t necessarily involve writing code, and it appears that these roles are robust to change. Tech/engineering team leads were one of the least affected roles, with 60% of them indicating that they weren’t affected by the recent layoffs. So, whilst middle managers and decision-makers were the most likely to face the axe, many organisations continued to recognise the value of individual contributors and those who manage them directly, regardless of their coding skills. Indeed, AI-assisted programming and visual development tools have reduced the reliance on traditional coding skills, and this area continues to experience rapid change and development.

It’s never easy to work in uncertain times, especially with the threat of redundancies. The tech sector is in a constant state of flux. Reassuringly, though, the recent explosion of generative AI has made developers feel better equipped to do their jobs, rather than threatened. We’re likely to see further iterations of the boom-bust cycle, and for those who want to feel more secure, it’s more vital than ever to continue building skills. SlashData’s Developer Nation community aims to empower developers to grow and learn in the ever-changing tech landscape. We’ll bring you insights, content, and access to field experts to help you get started or level up your game. Keep an eye on our socials to learn more about the next virtual meetup.