Yes, there have been new announcements from Amazon & Salesforce declaring they will be laying off some total 26000 people between them. What does that mean for me? Surely no new open headcount…
A new year, and this still holds true for 2023 even with all the layoffs of full time people from all the top employers in technology – but there are opportunities out there. Let me explain…
14 years ago – 2008 – in September as the markets started to tank and people were getting foreclosed on, many of the largest companies around announced large number layoffs across all departments. One of the most notable for me personally, was that Microsoft let go almost 6000 people from their full time roster. Living in Seattle, this was for me a huge hit to the local economy which also affected me deeply.
What had been a very competitive market with employers competing for candidates and salaries escalating now became a dead market, as in August I had been interviewing and within a week of the 8 employers I had interviews with only one came back with an offer that wasn’t much to write home about.
What’s more, the role was my last choice of the 8 since the hiring manager didn’t exactly endear himself to me in the interview when he opened our conversation with “If it were up to me, I wouldn’t be here talking to you right now. But everyone on the loop said you were fantastic so I have to go through with this.” Winner!
New Open Headcount?
Anyways – after the shock of the layoffs started to subside a few weeks later, tons of contract firms now had new open reqs to fill. You see, the company laid off full time people who were actually productive, and now they needed to back fill those seats with contractors to do that work.
So why do companies go through layoffs when times start to get tough or slide into a recession? It’s all about how numbers look on the quarterly and annual earnings reports…
Full time employees are operational expenses – they are a ongoing continual cost of business. This is how as an employee of a company you are looked at when the earnings reports come out. You reduce the long term profitability of the company.
Contractors are capital expenses – theoretically one time or project duration charges that only impact that year’s profitability and will be off the books in principle in the next year. That is something shareholders and Wall Street view as a big positive for a company’s value and potential for profit and revenue growth.
I have heard of a lot of cases where someone got their layoff notice and a nice package (1 month salary for each year worked plus automatic stock vesting), then get called in a couple weeks asking if they’d like to come back as a vendor or contractor at an inflated hourly rate but no benefits. The vendor company that is the official employer covers the health insurance and other benefits, but you are not an employee of BigEvilEmpire Corp anymore.
Its a case of FTC smoke and mirrors – bookkeeping treating you like a piece on a checkerboard that they move from temp to perm without any weight on their conscience. The ultimate irony is that in a year or two (or sometimes even less) they turn around and offer you a full time role at a higher salary than what you were earning before you got laid off.
This period of time, starting from about August of 2022 feels like that end of the prosperity cycle. It’s early in January but I can virtually guarantee that by January 20th or so the vendor firms will be flush with open reqs for vendors/contractors to backfill those empty seats. Especially in the technical jobs like Engineer, Developer, Test Engineer, Program Manager, SRE, etc… companies can’t just stop building stuff and expect to continue to rake in profits.
So here’s my money statement:
If you’re in the position of being laid off – take the money and the extended benefits package. It’s free money and they’ll likely also give you some 6 weeks of your salary on top of the package – use that time to assess what you’ve been doing and how satisfied you were or weren’t. Don’t freak out! There will be a slew of contract roles open that you can slide into and keep paying the bills until the point where everything rebounds and companies start competitive hiring again.
I’ve been through this cycle now about 4 times – it repeats roughly every 10-12 years, with a little bump in the middle (like 2015-16) but then it all comes back around to the competing offers and escalating salaries from multiple companies for a few years until the next downturn. During each one of these cycles someone in the securities business or an opportunistic group of people create some new high risk financial vehicle that everyone falls for and buys into, just for a lot of people to lose a lot of money after the greed turns to fear in the markets. Stuff crashes, the dust clears and settles, and everyone gets back to the business of working to earn money instead of relying on vaporware.
Prepare yourself now for interviewing for those contract roles. The good thing is those interviews aren’t as intense and oftentimes you’ll find out almost in the interview if you have the job or not. It also allows you to explore and find an employer who you feel more connected to and the work to be more satisfying and rewarding.
Book your sessions for mock interviews and coaching today – even if you still have your job, recruiters will see you as very high value candidates since you weren’t part of The Purge and so will covet you. Prodigy Career Coaching has an excellent track record at preparing candidates for interviews and being successful in finding their next roles and better salaries even in these challenging times.
