https://blog.pragmaticengineer.com/big-tech-hiring-slowdown/

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In the latest issue, I deliberately did not go deep into recent layoffs, even though there have been some. Just to touch on them:

• Snyk – a cybersecurity startup valued at $8.5B let go 198 employees (14% of the company.) I broke this news about many engineering leaders and software engineers being affected.
• Mindbody – a subscription-based fitness marketplace, which bought ClassPass, laid off 400 employees on Wednesday 26 October. I also broke this news and my sources report those let go include product managers, leadership and a few software engineers
• Zillow – a real estate tech company, let go 300 employees as per TechCrunch.

These are not small numbers, even if we know the majority of redundancies are usually not software engineers. In fact, they tend to be the minority.

I collated the total number of reported layoffs across tech companies through 2022 to date, using the layoffs tracker site, Layoffs.fyi. In total, 92,558 layoffs have been reported in this database for this year, at the time when this article published. Again, the vast majority of layoffs were not tech roles, nor software engineers. Some of the biggest reported numbers, like Getir laying off ~4,000 couriers, or Booking.com laying off ~2,700 customer services representatives, did not impact tech workers. My estimate is that 10% of the total number were likely tech jobs, so about 10,000 positions made redundant.

The Big Tech Hiring slowdown will be felt far more next year, than the layoffs were in 2022. We know more than 90,000 people could have been laid off in total, based on Layoffs.fyi data. How does this compare to the number of hires Microsoft, Google and Meta made during the past 12 months? I crunched the figures, and here are the results:

Headcount changes at Microsoft, Google, and Meta over the past 12 months. The three Big Tech giants have hired over 90,000 new employees during this time.

These three Big Tech giants alone hired more people – 92,000 – over the past twelve months, than were laid off, as per reports. However, there’s an important difference: Big Tech hires a much higher percentage of tech roles. It’s safe to assume that from these 92,000 hires, about a third to half could be in tech, and around 20% related to software engineering. So, about 18,000 software engineering positions could have been hired by these three Big Tech companies the past year - well outpacing the 10,000 - possibly even less - positions laid off as per the Layoffs.fyi stats.

We can expect all three companies to pull back significantly on hiring. Meta will almost fully stop, Microsoft is holding back until at least the end of the year, and Google is proceeding more cautiously. In their own words:

• Microsoft: “Our sequential headcount growth from Q1 to Q2 will be minimal.”
• Google: “Our Q4 headcount additions will be significantly lower than Q3 (10K people hired in Q3.)”
• Meta: “We expect hiring to slow dramatically and to hold headcount roughly flat next year relative to current levels.”

I can’t help but reflect on the article Layoffs don’t tell the whole story by Lightspeed Ventures partner Nnamdi Iregbulem, in which he made the point that hiring freezes have a wider knock-on effect on the industry, than layoffs do. In September, I wrote:

“What I find more worrying is when Big Tech hits the brakes, and puts hiring freezes in place.”

Well, Big Tech has hit the brakes: hiring freezes are in place and I am, indeed, worried.