How Vulnerable Tech Jobs Are During an Economic Downturn
Fears of an imminent economic downturn have made things extremely challenging for technology workers in 2023. During the first month of the year, nearly 90,000 tech workers were the victims of layoffs. By the end of the first quarter, the number had grown to more than 165,000.
While layoffs have slowed considerably in recent months — with slightly less than 10,000 occurring in August 2023 — an economic slowdown in China now has economists worried that the US could soon be facing a similar downturn. If that happens, it could lead to even more layoffs in the already beleaguered technology industry.
Michael Gibbs, CEO of Go Cloud Careers, has been advising tech professionals on how to secure high-paying tech positions for more than 20 years. Go Cloud Careers, which he founded in 2013, trains students for elite cloud computing careers. It has achieved an exceptionally high success rate of securing six-figure positions for its graduates by teaching a unique blend of technology knowledge and business acumen that Gibbs calls “certification plus.”
The vast experience that Gibbs has in the tech space has led him to believe that there are certain workers who do not need to worry about their jobs regardless of what the economic landscape looks like. The students he trains, who are still getting hired even during layoffs, are one example of those workers.
“People who are extraordinarily good technology professionals have no reason to worry about economic downturns,” Gibbs says. “The best of the best will never be laid off.”
For tech workers who aren’t in the upper echelons of their companies, Gibbs explains that there are certain steps you can take to make yourself layoff proof.
Shift out of back-end positions
Back-end tech jobs are the ones that become vulnerable during economic downturns. These include positions like software engineers and cloud engineers. They are hands-on positions that typically involve very little customer engagement. Gibbs points to two reasons why these are often the first positions to be let go.
“Because back-end jobs have no customer-facing role, they can be done remotely,” Gibbs explains. “When you are writing software, it doesn’t matter if you are in California, the Cayman Islands, Chicago, Cape Town, or Cameroon. What does matter is how much companies need to pay you, which means that when the economy is struggling, those jobs get outsourced to parts of the world where the work is least expensive.”
Back-end jobs are also vulnerable because they can often be automated. ChatGPT and other generative artificial intelligence (AI) tools have already proven they code almost as efficiently and effectively as human programmers.
“By leveraging the tools that AI has brought to the tech space, one DevOps engineer can now do the work of 30 cloud administrators,” Gibbs points out. “The power that AI brings to the tech space means that any hands-on position is vulnerable to layoffs, especially in tough economic times.”
Shift into a revenue-generating position
When the economy takes a downturn, consumers typically spend less. Studies done at the end of 2022 when media reports warned of an impending recession found 30 percent of Americans purchased less and 24 percent spent more consciously. When consumers tighten their spending, revenue-generating positions increase in importance.
“Revenue-generating positions, which are the tech people who sell a product, service, or solution, are the last people to get laid off during an economic downturn,” Gibbs says. “Those positions include account executives, product sales specialists, cloud architects, solutions architects, and any others that are involved in designing, presenting, and selling a solution. Organizations hold onto those people at any cost during an economic downturn.”
Gibbs especially highlights cloud architects as an elite and high-paying position that is revenue generating. Their role is to develop designs that use cloud computing technology to improve business performance.
“Cloud architects generate revenue for companies,” Gibbs explains. “They bring in business by meeting with clients, assessing their business challenges, designing cloud-based solutions for those challenges, then selling those solutions to the client.”
In a down economy when most businesses are struggling to remain profitable, cloud computing solutions make business processes more efficient and businesses more profitable. Consequently, cloud architects and the work they do are always in demand.
Establish yourself as a valuable team player
Your tech skills may not be enough to secure your job in an economic downturn. However, tech skills plus people skills can bump you up in the workplace hierarchy and keep you from getting laid off.
“Sometimes, the best thing you can do to avoid being among those getting laid off is to be likable,” Gibbs says. “Be your team’s favorite person, and be your manager’s favorite person. Don’t give your manager any excuse to include you on the layoff list.”
Gibbs also encourages tech workers to get involved as much as possible with special projects that come up at work, especially when they are projects with the potential to create new revenue.
“Volunteer for new projects,” Gibbs advises. “During a meeting when the manager is trying to assign work and ask ‘who’s interested,’ while everybody else hides under the table and pretends they already have way too much work, you can volunteer and show your value.”
The pace of layoffs in the tech space during 2023 shows that tech jobs are vulnerable during economic downturns — or even when downturns are only anticipated. That means tech workers need to be proactive to protect their jobs. Moving out of back-end positions and into those that are revenue-generating is a critical step toward decreasing your vulnerability.