The Great Software Engineering Crisis of 2023
The tech industry is facing a significant turning point in 2022 and 2023 that caused widespread concerns and uncertainty about the future of software engineering jobs. Tens of thousands of employees were impacted as the industry experienced unprecedented layoffs. Amid this tumultuous time in the tech industry, Slalom stands out as a company that has taken a different approach to its employees.
Some Layoff Statistics
The tech industry saw significant layoffs in both 2022 and 2023, with major companies like IBM, Google (Alphabet), Microsoft, Amazon, and Salesforce among those who cut jobs. In 2022, a total of around 160,000 employees were laid off, while in 2023, over 75,000 employees were laid off, with the numbers expected to increase as the year progresses. Some notable layoffs in 2023 include IBM (1.5% of the workforce), Google (Alphabet) (6% of the workforce), Microsoft (4-5% of the workforce), and Salesforce (10% of the workforce).
- IBM mass layoffs: 3,900 people
- Google (Alphabet) mass layoffs: 12,000 people
- Microsoft mass layoffs: 10,000 people
- Amazon mass layoffs: 18,000 people
- Salesforce mass layoffs: 7,000 people
Reasons for the layoffs
It could be tempting to just blame the pandemic slowdown and let it go but just recently, Microsoft, which laid off approximately 10,000 employees, announced its plan to invest $10 billion in OpenAI, and Sundar Pichai, CEO of Alphabet, stated for the layoffs that "These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities"
Then what could the reason be?
It is known that the tech industry has experienced a surge in hiring during the Covid-19 pandemic, driven by record revenues and fierce competition for top talent. This has resulted in record-high salaries and media attention focused on extravagant perks offered by tech companies. However, all the massive hirings where not focused around the current text and code generative AI explosion but towards supporting and extending what was present before the pandemic. It is notable that with the recent lay-offs, the median time for an affected employee in their role is approximately two years, which could indicate a reversal of hiring policies put in place during the pandemic and a shift, as Sundar Pichai mentioned, towards higher priorities like Large Language Models.
One could also notice that the use of AI and automation in the hiring process has been on the rise in recent years. Platforms have been developed to automate routine tasks such as reference checks or identity verification during the onboarding process. Reports have even surfaced that companies like Amazon have used AI to identify low-performing employees and initiate termination procedures. The question arises thus, whether the advancements in AI and automation have created a scenario where the quickest way to save money is to replace human employees with machines. While no companies have directly stated automation as a driving force behind recent layoffs, the affected job roles and circumstances suggest that it may be a contributing factor.
In total around than 160000 lost their jobs in 2022, and another 75000 in 2023.
At the end, while it is difficult to determine the exact impact of AI and automation on recent layoffs in the tech industry, it cannot be ignored that such advancements have played and will play a role in the current job market landscape.
The impact of code generative AI on Software Engineering jobs
The rise of code-writing AI tools like ChatGPT and Co-pilot have generated fear and uncertainty about the future of software engineering jobs, but also of open-source code, community articles and more. These tools are capable of generating boilerplate code, leading to concerns about the potential for automation to replace human software engineers, at least to a degree.
Nevertheless, despite concerns, experts believe that human software engineers will remain in high demand in the near future, and these tools will be valuable allies that assist with repetitive tasks such as writing boilerplate code, implementing best practices, and debugging or testing. Currently, AI tools for code writing lack the ability to produce creative and high-quality code and software engineering requires critical thinking, problem-solving, and communication skills that are exclusive to humans.
Although certain aspects of code writing can be automated, particularly those related to declarative languages, human software engineers are expected to retain a crucial role in the tech industry for the foreseeable future.
The Future of the Tech Industry
The tech industry has always been dynamic, adapting and evolving with new developments and breakthroughs. Despite the current crisis, the future of the industry is expected to be bright. As the economy recovers, demand for technology products and services is expected to grow, leading to increased investment in research and development, marketing, and staffing. This growth will provide opportunities for new technologies, such as AI and 5G, to emerge and drive innovation.
Moreover, the increasing adoption of AI and 5G technologies is expected to create new job opportunities in the tech industry. From data scientists and AI engineers, to 5G network specialists and cybersecurity experts, the growth of these new technologies will create a wide range of job opportunities for skilled professionals. As a result, most already believe that the tech industry will continue to be a major source of employment and economic growth in the coming years, providing stability and security for those in the industry and those looking to enter it.
Slalom's Commitment to Employee Security During Economic Downturns
During the COVID-19 pandemic, the company made the decision to not lay off any of its employees and instead found alternative cost-cutting measures. This commitment to its employees demonstrates Slalom's values and dedication to creating a supportive and stable work environment, and it extends beyond simply avoiding layoffs. The company recognizes the value of its workforce and the need to continuously upskill and develop its employees. To achieve this, Slalom has implemented innovative strategies to retrain and repurpose its workforce to meet the changing needs of the business. This approach not only helps to retain valuable employees, but it also ensures that the company has a skilled and adaptable workforce that can stay ahead of industry trends and changes. By investing in its employees, Slalom is able to maintain a competitive edge and create a positive work environment that attracts and retains top talent.
Slalom is a private company that places a strong emphasis on its employees!
Testament to Slalom�s brilliant navigation of the current stormy seas, is the expansion of its presence in new markets. The company already has a strong presence in 45 markets around the world, including the United States, United Kingdom, Australia, New Zealand and Japan, but its recent expansion into Germany marks the beginning of a European invasion, with plans to continue expanding into Ireland, the Netherlands and beyond.
Slalom is committed to continued growth and expansion, which requires a concerted effort to bring on new talent. In support of this growth, the company is currently engaged in an ambitious hiring initiative in Europe, with the goal of significantly expanding its workforce in the region.
Just for Germany the company plans to triple the current workforce, with equally impressive growth goals for the rest of the region.
This growth sprint represents a unique opportunity for the company's 14,000 employees, who have been given the chance to grow and develop along with Slalom at a phenomenal rate. The company's commitment to its employees, coupled with its ambitious growth plans, creates an environment that is both supportive and empowering for all those who are part of the Slalom team.
Interested in joining? Find your future here: https://jobs.slalom.com/
2023 mass layoffs
- IBM layoffs: 1.5% of workforce laid off (January, 2023)
- Gemini layoffs: 10% of workforce laid off (January, 2023)
- Yankee Candle layoffs: 13% of office workers laid off (January,2023)
- 3M layoffs: <1% of workforce laid off (January, 2023)
- Spotify layoffs: 6% of workforce laid off (January, 2023)
- Google (Alphabet) layoffs: 6% of workforce laid off (January, 2023)
- Microsoft layoffs: 4-5% of workforce laid off (January, 2023)
- Amazon layoffs: 1-2% of workforce laid off (January, 2023)
- Carta layoffs: 10% of workforce laid off (January, 2023)
- Coinbase layoffs: 20% of workforce laid off (January, 2023)
- DirecTV layoffs: 5-6% of workforce laid off (January, 2023)
- Salesforce layoffs: 10% of workforce laid off (January, 2023)
- Vimeo layoffs: 11% of workforce laid off (January, 2023)
- Goldman Sachs layoffs: 8% of workforce laid off (January, 2023)
- Compass layoffs: size of layoffs not immediately known (January, 2023)
- Stitch Fix layoffs: 20% of workforce laid off (January, 2023)
2022 mass layoffs
- Cisco layoffs: 5% of workforce laid off (December, 2022)
- DoorDash layoffs: 6% of workforce laid off (November, 2022)
- Candy Digital layoffs: 33% of workforce laid off (November, 2022)
- Redfin layoffs: 13% of workforce laid off(November, 2022)
- Amazon layoffs: 1% of workforce laid off beginning (November, 2022)
- Meta layoffs: 13% of workforce laid off (November, 2022)
- Twitter layoffs: 50% of workforce laid off (November, 2022)
- Zillow layoffs: 5% of workforce laid off (October, 2022)
- Peloton layoffs: 12% of workforce laid off (October, 2022)
- DocuSign layoffs: 9% of workforce laid off (September, 2022)
- Taboola layoffs: 6% of workforce laid off (September, 2022)
- Snapchat layoffs: 20% of workforce laid off (September, 2022)
- Outbrain layoffs: 3% of workforce laid off (July, 2022)
- Lyft layoffs: 2% of workforce laid off (July, 2022)
- The Mom Project layoffs: 15% of workforce laid off (July, 2022)
- Opensea layoffs: 20% of workforce laid off (July, 2022)
- Substack layoffs: 14% of workforce laid off (June, 2022)
- Ninantic layoffs: 8% of workforce laid off (June, 2022)
- MasterClass layoffs: 20% of workforce laid off (June, 2022)
- Bird layoffs: 23% of workforce laid off (June, 2022)
- Superhuman layoffs: 22% of workforce laid off (June, 2022)
- Cameo layoffs: 25% of workforce laid off (May, 2022)
- Robinhood layoffs: 9% of workforce laid off (April, 2022)
- Virgin Hyperloop layoffs: 50% of workforce laid off (February, 2022)
- Peloton layoffs: 20% of workforce laid off (February, 2022)
- Beachbody layoffs: 10% of workforce laid off (January, 2022)