Over 50,000 people have been laid off thus far in 2024. With 7.3 million people working in technology in the country, how big of a deal is it? Seemingly, it barely scratched the surface, while the reality is ongoing, often seemingly fruitless job search. Applying to endless posted roles doesn’t seem to be doing the trick. The previous ‘success model’ of asking professional connections for help, be it an ex-manager, or an ex-colleague, generally results in either lack of response or empathetic replies full of similar-sounding stories of internal changes, hiring freezes, and general projects being cut. What’s a job seeker to do in this unpredictable and shallow job market then?
The first question is to ask: do I NEED to look for a job now? If you have been laid off, or you hear about upcoming cuts, you may not have much of a choice, short of a trust fund to fall back on. If you are currently working, try to examine your motivation for leaving. Income won’t keep up with inflation? Don’t know how within a few years you went from spending $3K on an apartment and $500 on food for your family to $5,500 for less space and $900 for less food? Unsure how you went from traveling monthly to fun destinations to budgeting for an annual trip? Well, incomes have been falling, besides inflation driving up prices, making the long-awaited rate cuts less likely. Remote work got taken away with hybrid or fully onsite demands? Availability of remote work has dropped greatly, with empty office buildings calling their employees back. The grass isn’t necessarily greener elsewhere. A layoff is more likely to affect a new, yet not fully acclimated employee over a tenured one. Is it even worth trying, especially in this unpredictable market?
There are a few main factors in place, affecting hiring trends.
Financing a house got more expensive, with rates for a 30 year mortgage hovering about 7%.
Financing a purchase has become more expensive with credit card interest rates ranging from 20% to higher. Having a credit score of 800+ is no longer a guarantee of a high credit limit approval either.
Corporate borrowing from banks got far more expensive also, with rates as high as 12%+, where companies prefer to cut projects and lay off employees to generate operational revenue, instead of borrowing more, expecting high returns.
Startups get tiny investments for their ideas, if at all, unless already profitable, like Andreessen Horowitz likes to do. An entire generation of Venture Capital investors is giving up on their previous investment approaches, with new players learning how to game the market anew.
High dividends still need to be paid, or stockholders abandon ship, sinking the actual value. Even Meta realized the need to pay to hold its stock, as rising valuations no longer have the same impact, as before.
Private Equity abandoned its model lately also, with even players, like Blackstone cashing in, rather than investing now, due to the high level of distressed firms, carrying an oversized amount of debt.
On surface it may seem, like it’s already making a difference, with some valuations in GenAI companies and in GenAI-driven companies soaring beyond any reasonable calculations. GenAI marketplace for OpenAI is plugging along with billions in projected revenue, but what’s a $2 billion projection out of the $80 billion valuation?
The industry is still largely anticompetitive. While cloud-makers, like AWS and Salesforce are making it easier to get into GenAI, is a helpful, but largely basic and often wrong chatbot worth the prices of enterprise models in the age of scaling down? Hence, even the technology powerhouses slowdown in overpromising. New players are constantly acquired by established entities before anticompetitive factors play a role, and when a new idea enters the market, current power brokers attempt to slow them down, even if it is still largely just a hype.
The scariest part of GenAI is replacing the tech workers. While the introduction of innovation through automation spurred the DevOps model and SD-WAN, causing for more technology implementations and a greater need for technology experts, GenAI is not the same. Currently, tech workers are working hard on creating their replacements, but what to expect, once LLMs have finally been fully trained?
Right now, the main separation between the promise of AI and the impact of AI is availability of powerful computers. While Nvidia’s stock is climbing up, Sam Altman is asking for trillions to solve the lack of needed chips, and Quantum Computing in Dubai proving to be inefficient for today’s demands, with substantial growth not expected for another decade or so.
What does it mean for your job search?
Available funding.
Unfortunately, with lack of funding for new hires, many firms post unapproved roles. Getting headcount preapproved has become more difficult with hawkish BODs and CEOs, looking to survive the current cycle and scale down. Internals budgets are still rather high, with the stock market gradually climbing up, AI investments still exciting sponsors, and new companies constantly vying for their spot among the leaders. Companies can generally take some of the money from their budgets for a specific person’s salary, but not to get headcount preapproved. End of 2023, companies conducted interviews, waiting for the market to improve, so they could make offers. First quarter of 2024 produced more inquiries, than real hiring activity, with most resumes still being stored in companies’ HR systems, instead of being passed onto a hiring manager to consider. What’s especially damaging is staffing firms posting nonexistent or unapproved roles, sending received resumes to every client they ever had without even a heads up to candidates, essentially blocking candidates’ chances of getting a job in those firms, as the stuffing firms will hold referrals for about a year after submitting.
ATS filters.
Long gone are the days, when recruiters monitored their inboxes with anticipation of hard-to-find talent. Now, computer programs judge whether you are the right hire to even consider. AI would seem to do it better, but laws in places like New York mandate a certain use of AI in hiring – don’t discriminate. Seems like a reasonable expectation, but is AI even capable of getting it right? From Google’s Gemini’s attempts to ‘be fair’ producing purely erroneous results to SCOTUS making Diversity and Inclusion efforts borderline illegal, AI is nowhere near ready to produce positive results for you. While having evolved past ‘the buzzword criteria’, these systems can’t evaluate intangibles, personalities, or potential, viewing resumes for human beings as an RFP pitch for a product.
Presentation.
The majority attempts to present themselves in the most favorable light. When going to a Broadway show or a business meeting, most people opt to put on the best attire, taking care of everything from hair to even color of clothing. Hair and makeup are often done in prestigious expensive salons, clothing labels hold a meaning, shoes are polished, and cars are washed by others. Yet, when it comes to resumes, an absolute preponderance of people opt to write own resumes. On one hand it makes some sense: most people had to write multiple essays just to graduate before entering professional workforce, and most work has to be documented, whether it’s an application development or a Product Management effort. In reality, it makes very little sense, as when was the last time you decided to address a specialized deficiency on your own, be it a burned-out motherboard in a computer, or a need to build a garage? A resume is your presentation, a chance for a potential employer to ‘judge a book by the cover’, before investing time and effort in interviews. When measured against a multitude of other, laid off and desperate for a new job people, it simply puts one in a disadvantageous position. From formatting errors, a multitude of various fonts, spelling mistakes, and questionable design choices, to failing to properly to explain work done, technology handled, or project managed, resumes often sink one’s chances, more than help. Considering the fact that most firms won’t revisit you for at least a year, after considering you, it’s that much more important to come off properly from the get-go and hiring an expert to handle the crucial task. A GenAI or some automated program may help you avoid misspellings, but will it separate you from the crowd of other job seekers, putting you ahead in the hiring process?
Decisionmakers.
You don’t go to an ice-cream shop, asking for auto parts, and don’t ask a school’s janitor to change math curriculum. It’s all about knocking on the right doors to get the desired response. Why would you send your resume to a posted job, expecting for an automated system (ATS) and then a junior recruiter to judge your fit for a role? It’s no great secret that hiring managers make hiring decisions, even if HR or C-level executives may determine a firm’s hiring strategy and recruiting departments handle the influx of received resumes. In the already challenging hiring climate, it makes it that much more difficult to land an interview, when dealing with ‘gatekeepers’, instead of ‘decisionmakers’.
Staffing and consulting firms.
In the current conditions and even in almost any market, companies pay external firms to find talent they can’t find on their own. Growing internal recruiting teams is costly and difficult. HR reps and recruiters demand a salary, benefits, and workspace to perform their work. Contingency-based staffing firms do free work, unless and until they succeed. While many opportunities go unfilled for months at a time, and qualified and fitting employees are still incredibly difficult to find, lack of mass hiring and presence of mass layoffs created the illusion of absence of a need to utilize professional agents for hiring. Let’s be honest, most staffing agents can hardly be considered ‘professional agents’ anyway, but in 2024 it doesn’t stop hiring firms from trying to save money on placement fees and hire on their own, using external recruiters only for extremely difficult-to-fill roles. Your (supposedly) unbiased agents, handling prep before interviews, follow-up after, salary negotiations, and facilitating all procedural steps are no longer available to you, being replaced by internal hiring specialists, with clear allegiances toward hiring firms paying their salaries.
In conclusion.
The work of representing yourself falls on YOU. Making sense of what jobs are approved and what are just exploratory searches, incapable of making offers becomes your second job, where even relying on your gut often misfires, turning job search into a game of roulette, but with far more options, than black and red to pick from. Understanding market trends and implementing them into your resume is meant to make you a top labor analyst with predictive analytics ability. It’s all about being prepared and putting your best foot forward just to get visibility.
This market won’t last forever, but summer hiring, generally handled by presently unfunded startups, isn’t looking very promising, and being an election year, last quarter of the year may bring no relief either, as the outcome of the election will determine a lot for the next 4 years, from fiscal policy, to the extent of compliance efforts, to industry trends. The Federal Reserve can’t decide when and if to cut interest rates, and even if it will, the results from approximately 3 cuts of a quarter of a percent will not impact the economy for many months.
Excellent analysis.