Software developer layoffs and hiring freezes on the rise

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The sluggish economy is beginning to squelch the hot developer job market, which could mean reduced job prospects for developers in the coming months.

In October, the tech industry continued to hire at an increased rate, according to CompTIA, a nonprofit that analyzed U.S. Bureau of Labor Statistics employment data earlier this month. But the hiring landscape changed in an instant. Since that analysis, dozens of tech companies — including Amazon, Twitter and Meta — have slashed jobs or implemented hiring freezes. Developers on the job market will find it more of a challenge to get hired as competition heats up. But options worth considering include updating resumes with cutting-edge technology and seeking out firms with recent venture capital cash infusions, according to industry experts.

“Every place you turn, the news goes from the bad — hiring freeze — to the [worst]: layoffs,” said Shiva Nathan, founder and CEO of Onymos, a features-as-a-service provider.

For example, Amazon announced a pause on incremental hiring in a Nov. 3 blog post; Twitter announced mass layoffs the following day; and the following week, Meta slashed 13% of its workforce. Dozens of other tech companies followed suit, including Avast, Cisco, InfluxData, Intercom, OwnBackup and UiPath, according to layoffs tracking site Layoffs.fyi.

The tech-sector job market is cooling. This is especially true as it relates to recruiting developers for larger, well-recognized brands in the industry, said Nate Nead, CEO of Dev.co, a software developer talent services company based in Seattle.

“While some might consider the hiring freezes and layoffs at Facebook, Amazon and Microsoft a ‘canary in the coal mine’ scenario, they are more akin to the bloat that is often associated with high-growth, publicly traded companies who are seeking to appease growth-hungry investors,” he said.

However, the trend will continue down-market to midsize companies — albeit at a slower rate. Such firms are typically less growth-aggressive and more prudent in resource management, Nead said.

However, Paola Martinez, vice president of people operations at Jobsity — a developer talent company based in New York City — said she is already seeing a trend in hiring freezes and layoffs.

“Clients are either afraid and making decisions based on speculation and market news or just deciding to pause hiring to be safe and safeguard their budgets,” Martinez said.

Many tech companies have instigated hiring freezes.

While most layoffs have targeted development support personnel in departments such as human resources or talent acquisition, a few layoffs have already affected developers, said Giancarlo Hirsch, New York managing director at Glocomms, a tech recruiting agency headquartered in London. Even experienced developers aren’t immune from the sting of redundancy, he said.

“It’s always amazing when you see the Ph.D.s from Stanford in that bunch,” he said.

On the other end of the spectrum, the market for coding boot-camp graduates will turn ice cold soon, Hirsch said.

“If you are not really a computer scientist and you wanted to spend 10 grand to take your English bachelor’s degree to teach you how to write some JavaScript code, you’re not going to have an easy time getting your $130K comp that you thought you could get six months ago,” he said.

Some skills remain in demand

Freelance developers with economic analysis skills will continue to find work, said Sean Middleton, chief revenue officer at Toptal, a software development outsourcing firm.

If you are not really a computer scientist and you wanted to spend 10 grand to take your English bachelor’s degree to teach you how to write some JavaScript code, you’re not going to have an easy time getting your $130K comp that you thought you could get six months ago.
Giancarlo HirschManaging director, Glocomms

“Many of the companies we serve require talent that can support budget-control efforts with data revenue analysis,” he said. “For example, cost cutting, and streamlining operational processes.”

Other skills that remain in high demand include cutting-edge software development in areas such as artificial intelligence, machine learning and intelligent automation, said Nilesh Thakker, global head of talent at Zinnov, an outsourcing advisory firm based in The Woodlands, Texas.

“Developers who are not upgrading their skills will find it hard to keep up with the competition and the volatile market, ” he said.

One trending area to consider include WebAssembly, an assembly language that broke out from web browsers into edge computing earlier this year. Another is software supply chain security, which faces increased challenges with the proliferation of third-party platforms and services. Companies such as Docker are currently hiring developers in those areas.

More options for developers looking for work

One option for job hunters is to consider a short-term consulting position, Nathan said.

“You can try to create a position for yourself,” he said. “Write to companies offering to help fix a particular problem you have noticed or [suggesting] a cool enhancement you can make to their offering. Be creative.”

Developers should also seek out companies that recently raised venture financing, Nathan said.

“While the number of candidates applying for an open position will be high, as will be the level of competition, there are still good chances to land a full-time job with these companies,” he said.

Hirsch agreed that developers should consider working for startups as big tech companies tighten their belts.

“What’s going to happen now is that people are going to be forced to advance their careers by getting into more scrappy, less resourceful environments,” he said “There’s always a large amount of incoming cutting-edge tech companies that are building something new and cool. And there will be great opportunities for people who have come out of exceptionally resourceful environments to get into slightly less resourceful environments, roll their sleeves up a bit and wear a few more hats.”

The market will pick up again, Hirsch said, but he added that the days of developers moving around in the search for higher compensation are over.

“We’re not going to get full hiring from Audible and Walmart and Google the way we did, because they’re not bleeding talent the way that they were,” he said.

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