The Current State of the Tech Job Market

This blog post kicks off a series designed to make navigating the current tech job market more approachable. In this series, technical recruiters, career coaches, and engineering hiring managers are sharing industry insights and advice for software engineers on the job hunt. For all posts in this series, head to the Navigating the Job Market page.

Is the tech market really as bad as it seems? Where are all the jobs in tech now? How do I talk about being laid off? These are some of the questions we’ve been getting a lot from engineers, including from our own Formation Fellows.

Hi, my name is Sophie Novati – I’m the CEO & Founder of Formation. Before co-founding Formation, I was an engineer at Facebook and Nextdoor for over 6 years where I interviewed hundreds of engineers and even ran my own coding bootcamp, Buildschool, for 2 years. Since then, I have helped hundreds of mid-level and early career engineers navigate job transitions at Formation.

Today, I’m proud to kick off the first of a series of blog articles designed to answer the exact questions I asked at the beginning of this post which all boil down to one major theme: how do I navigate the current rollercoaster of a tech job market? In the coming weeks, we’ll be posting resources written from the perspectives of experts on the topics — senior engineers, technical recruiters, engineering managers, career coaches, and more. By doing so, we hope we can make the job hunt feel more approachable and help you land your next role.

To kick off this series and put all of our upcoming resources into context, let’s take a look at the state of the current tech job market — starting with the headlines.

1. The tech industry isn’t as bad as new cycles suggest

Despite the rollercoaster headlines, the current state of the tech industry may not be as bad as you think. Specifically, let’s look at unemployment rate and the number of technical workers and companies.

• The tech unemployment rate has actually fallen to 1.5% compared to a national average of 3.6%. This indicates two things. First, tech workers who have been laid off have been re-hired. Second, many of the layoffs at the tech sector level have been non-technical workers, like those in sales, marketing, HR, and business support roles. (CompTIA report)
• The number of tech works today still far exceeds the pre-pandemic volume. Meta, Amazon, Microsoft, and Google, for example, collectively grew their workforce by almost 875K workers during the pandemic. When compared to the 90K job cuts made in the past few months, that only represents ~10% of their pandemic-era growth. Additionally, there are 585,000 tech companies in the U.S., and the tech sector is still expected to grow by 5.4% in 2023.

So while layoffs have caused some uncertainty in the market as a whole, these numbers are all relative. A closer examination of them can put the headlines into perspective for software engineers and other technical workers.

2. The Big Tech layoff is causing a talent re-distribution

An even more optimistic, though logical, view is to consider the wave of layoffs a talent re-distribution. Historically, some of the most experienced software engineers were being hoarded by a small concentration of tech giants (Amazon, Meta, Google, Netflix, etc.). Now, talent is being disproportionately spread around to new industries and companies, sharing the wealth of great engineering practices and experience at scale across the industry.

It’s worth noting that we saw a very similar phenomenon happen during the tech boom, which lasted from the mid-1990s to the early 2000s. During that time, many talented workers left traditional industries to pursue careers in the booming tech sector. We’re seeing this happen but in a slightly different form: talent from top players (FAANG and FAANG-adjacent) is now being redistributed to non-FAANG companies across a variety of industries.

3. Software engineering continues to be a great career field

If you’re a software engineer, we have good news: you’re still in a great line of work. The day-to-day today may look different than it did 6-12 months ago, but zooming out just a little bit reminds us how much the pandemic has accelerated digital transformation. That trend isn’t going anywhere, which means engineering roles will continue to be abundant.

Additionally, the term “tech industry” used to be a phrase we’d often use, but the fact of the matter is that every industry is one that either has already been revolutionized by tech or is still yet to be. This means that as a software engineer, your skills are broadly applicable to any number of growing industries.

🤔 Q & A: Most asked questions

Despite the news cycles and headlines, software engineering continues to be a great field to be in long term. The pandemic accelerated so much about our world, but there are always going to be more problems to be solved and more roles for engineers to fill.

If you're an engineer trying to navigate these tricky times, we will be sharing out a lot more resources; follow us on LinkedIn so you don’t miss anything! In the meantime, I want to leave you with just a few rapid-fire answers to some of our most asked questions.

Should I even bother preparing myself?

• Yes. Engineers now need to be well-prepared for the interview process, maybe even more so than in the past. Preparing is crucial to feeling confident going into every interview. Now is actually the perfect opportunity to take a step back and take time to brush up on your data structures and algos, behavioral skills, and more.

Have salaries gone down?

• We haven't seen any decrease in base salaries, however we have seen signing bonuses decrease over the past 6 months.

Should I just wait it out?

• This likely depends at least a little bit on your personal and financial situation. The one thing we can say is that if you’re an early or mid-career engineer who still has a long career ahead of you, realize that being an engineer means a lifelong commitment to learning, so now is not the time to take your foot off the gas.

Is it too risky to switch jobs now?

• No. If the Big Tech layoffs have taught us anything, it’s that no job will ever be 100% safe. Switching jobs can also be healthy for your mental health and very rewarding if you’re excited about the new company, role, and team.

I hope this has been helpful! We’ll be publishing resources in the coming weeks to help you navigate the market, including advice on where and how to search beyond Big Tech, how to talk about being laid off in an interview, and more. Follow along as we release these resources weekly on our LinkedIn page and our blog. We’ll see you next week where we'll hear from a Formation Mentor and Engineering Hiring Manager about the job market's affect on technical interviews.

Looking to join our adaptive learning SWE Fellowship and get mentorship from senior engineers? Apply below.