When Roger Lee graduated from Harvard in 2008, he and his fellow classmates were thrust into a new kind of working world. Young and college-educated, many of them witnessed, for the first time, the meltdown of the banking sector, and were disillusioned with the idea of working in the once-stable finance field.

Years later, Lee founded the crowdsourced layoffs database Layoffs.fyi, which began documenting tech layoffs during COVID-19. Since then, Lee has been entrenched in layoffs data and employee outlook data with his co-founded companies Comprehensive and Human Interest, which offer employee benefits.

“I saw my classmates start to realize that the finance industry was not nearly as stable or lucrative as they previously thought,” Lee said via email. “I believe something similar is happening with the technology industry today.”

He’s not wrong. According to Handshake, a hiring platform for college students, the graduating class of 2023 is not as interested in working for a big-name, fast-growing company as the class before it. And many are applying to a wider set of industries than the class prior.

As tech quiets down on hiring, several other industries have quickly gobbled up some of the 141,000-and-counting laid off tech workers in the U.S. More than half of displaced tech workers found jobs outside of the tech sector in 2023, according to LinkedIn.

“There is such a distrust of big tech,” said Adam Struck, a venture capital founder whose startups have been hiring laid off tech workers. “And it’s just so hard generally right now to make it in tech, no matter what stage you’re playing at.”

Leaving the tech industry

Big tech companies, which remained largely stable during the financial crisis and ballooned during the pandemic, are reckoning with the resilience of their own industry. Together, Amazon, Meta, Alphabet, Microsoft and Salesforce 1 were responsible for 42% of tech layoffs between January 2022 and March 2023, according to an analysis of The Crunchbase Tech Layoffs Tracker.

Meanwhile, companies you wouldn’t consider “tech” companies are hiring talent like crazy: Disney, Deloitte and Bank of America are looking for software engineers, cybersecurity professionals and data scientists, according to career insights firm Dice, a DHI Group company.

In the Handshake survey of 954 students, only 31% said working for a big name was an important factor, compared to 41% of students who said so just a year earlier. Of those students surveyed, 36% said they’re casting a wider net of applications — expanding their job searches to companies and industries that could use those skills, including the government, nonprofit and retail sectors.

“Once the intense hiring pressure eased from the tech industry, it allowed these other industries to finally start doing their job,” said Ron Hetrick, a senior economist at Lightcast, a labor market analytics firm. “Every industry is trying to make advancements, whether it be in AI or robotics. And the inability to find workers during that time was exceedingly painful.”

According to Lightcast, the median wage for manufacturing jobs has surpassed that for tech jobs. And in the finance and insurance space, the median wage is higher than both, indicating other industries are ready to be just as competitive for tech talent as Silicon Valley companies.

“They started figuring out the game and saying, ‘Look, if we want people, we’re going to start paying at that level,’” Hetrick said.

Coming back to tech

But more competitive pay from other sectors doesn’t mean that tech companies, particularly tech giants like Meta and Google, are going to have a hard time finding tech talent when it’s time to start hiring.

“Companies have wised up and said, ‘We don’t have to pay as high, because there are really solid candidates who don’t want to return to an office, and they’ll sacrifice [pay],” Hetrick said.

That’s a big score for the tech industry, which is among the most remote-friendly job sectors in the U.S. According to LinkedIn data, over a quarter of all remote-friendly jobs come from the tech industry.

“It’s likely that many tech companies will continue to leverage flexibility in order to attract talent, especially as tech companies rethink some of the salaries and other benefits that they used to offer,” said George Sanders, senior editor-at-large at LinkedIn.

According to Hetrick, the tech industry will likely return to a more competitive environment, competing with retail, manufacturing and banking industries. And Lee, who has spent more than a decade in the industry building his own companies, doesn’t plan on leaving any time soon.

“Ironically enough, many of my former classmates went into tech after the Great Financial Crisis lowered the appeal of finance as a career path,” he said.

Sound familiar?

Illustration: Dom Guzman

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