Tech layoffs up, job offers gone, but much hiring

Tech occupation employment has fallen three times in the past 20 years. Still, over that same period, tech employment has increased from 3.5 million in 2002 to 5.2 million in 2021, according to employment data assembled by CompTIA, an industry group. A recession could increase tech layoffs, putting attention on early barometers of job market trouble.

The tech employment situation is, at this moment, paradoxical. Tech layoffs are on the rise, and there are anecdotal reports of people with rescinded job offers, but tech job ads are still growing. 

Job site Dice says it sees continued high demand in its postings. "We've seen the largest gap between supply and demand in the history of the country emerge this year," said Art Zeile, CEO of DHI Group Inc., which runs Dice.

The IT job market has grown by 93,400 jobs this year and at "a pace faster than prior years," said labor market analyst Victor Janulaitis, CEO at Janco Associates, a research firm in Park City, Utah. "There are still over 100,000 jobs that have not been filled due to the lack of qualified candidates."

But Janulaitis added that while there is still growth in the tech job market, it could be seeing the beginning of hiring delays as employers look ahead.

Gartner, however, doesn't see the job-cutting actions in midsize to large firms. In a survey late last month, about 200 HR and business leaders found that 66% expected increases in business revenue over the next quarter. And few planned to slow down hiring.

"Companies are still in growth mode," but "cautious," said Jamie Kohn, research director in the Gartner HR practice. "They want to have the resources that they need to continue growth if the downturn is not that severe."

But there are signs of problems. Some firms have announced tech layoff plans, such as cryptocurrency firm Coinbase Global Inc. and Tesla Inc. Other firms may freeze hiring and rescind job offers. An anonymous Reddit poster, for instance, said a job offer was rescinded one week before the start date, and after he had given notice to his now-former employer. The job seeker got a new job from an employer he had previously turned down.

Companies are still in growth mode.

Layoffs.fyi, which tracks public reports of layoffs at startups, reported 17,000 layoffs in May and nearly 11,500 this month, both significant increases from prior months. 

"There are many layoffs that haven't been publicly reported," said Roger Lee, who created Layoffs.fyi. He is an entrepreneur who co-founded San Francisco-based Human Interest Inc., a firm that helps SMBs develop retirement plans. The layoff tracking site "is definitely undercounting the total number of actual layoffs," he said.

One reason employers are cautious about changing direction on hiring is high quit rates. The knowledge worker turnover rate is 14%, based on responses from 153 HR and business executives to the Gartner survey. Knowledge workers include occupations such as software engineers and developers.

But the history of tech employment says this sector will do better than most in a recession, according to Tim Herbert, CompTIA's chief research officer.

Herbert said the 2009 recession caused negative growth years in both tech-occupation and tech-sector employment. Tech occupations are all jobs, whether in utilities, finance or tech, that are tech-related; tech sector employment is the overall employment in the tech industry.

But even during that period, "tech held up reasonably well and bounced back faster relative to the overall economy," Herbert said.

It's unclear how the remainder of this year will play out "because it is still a very tight labor market for tech talent and there hasn't been a drastic pullback of employer hiring activity," Herbert said. This "suggests a repeat of previous periods whereby tech employment growth may stall but will hold up well relative to the overall economy and bounce back faster than most other occupation or sector categories."