This year has so far been full of bad news for American tech workers.

Fired workers are expressing heartbreak over social media. They got the bad news early via an email.

Once sitting atop of the financial mountain during the pandemic, tech companies are feeling the effects of a return to normalcy. In February, Mark Zuckerberg, the boss of Facebook owner Meta, declared that 2023 would be the year of efficiency. And in business speak, efficiency means firings. Last month, Meta announced a pile of job cuts.

Meta

CEO Mark Zuckerberg says in a new blog post, the company will lay off 10,000 employees. That was on top of the 11,000 staff it laid off last November. Days later, Amazon said it would cut a further 9,000 corporate employees, having already sacked 18,000 white-collar types. This news coming from CEO Andy Jassy in a memo to Amazon employees that is now shared on the company's website. All those pink slips are adding up.

So far this year, American tech firms have announced plans to lay off 130,000 workers, which is in addition to the 140,000 workers they laid off last year.

Tom Lee Devlin is The Economist's global business correspondent and co-host of Money Talks, our sister show on business and finance. Underlying

this is really a shift in mindset in the industry. For workers, this is all, of course, incredibly disorienting, but investors, for their part, are loving the newfound focus on profitability with the tech-heavy NASDAQ index up by 18% since its lows last December.

130,000 workers this year, 140,000 last year. Let's put those numbers in context because they're kind of eye-watering numbers at the outset here.

Yeah, of course. I mean, a quarter of a million people being fired is undoubtedly a big headline number. And again, that comes with a heavy toll on the people involved. But you do need to put it in perspective. So the American tech industry employs just shy of four and a half million people. So we're talking about 6% of industry employment. And what's more, many parts of the tech industry actually continued hiring pretty enthusiastically through most of 2022. So it really wasn't until the start of this year that we started to see the total number of people employed in tech plateau and then start to decline very slightly. And I mean, just for comparison, from the peak of the dot-com boom in the early 2000s to its low point around 2003, America's overall tech workforce declined by something like 23%. This is not the same situation as the dot-com boom. The tech industry is very different today from what it was then. But it is interesting because it suggests that tech layoffs might not be over yet. And companies are still adjusting to this world of higher interest rates and greater pressure on margins from their investors. So last month, we saw Amazon and Meta both announce their second round of layoffs. And others, like Salesforce, are expected to announce more layoffs in the weeks ahead as well. So I suspect there is more still to come here. And

of the ones that have already gone, is there a particular part of the sector that's getting the chop? Yeah,

tech specialists, so people in jobs like software engineering or data science have mostly been spared the worst of it, although in some cases they have also been on the chopping block. And Meta, for example, is in the process of restructuring its tech teams at the moment. But in most cases, the axe has really fallen disproportionately on business functions like sales and marketing and recruitment. And arguably, that's appropriate because actually those types of non-tech occupations have steadily grown as a portion of the technology industry's employment over the past few years, which some and certainly, interpret as a sign of bloat. But

once that perceived bloat is taken care of, could the tech specialists who have until now been spared maybe face the danger that they haven't yet? I

think the short answer is yes. But what I will say is that those workers, the coders and data gurus and machine learning experts are among the most in-demand workers in the economy. In fact, the unemployment rate for those workers in America is an incredibly tight 2.2% compared to 3.6% for the workforce as a whole at the moment. And actually, the fact that those workers are being released back into the wild, so to speak, could be a boon for the parts of the economy that have been desperately trying to get their hands on those skill sets for some time now. And

what parts of the economy is that?