The Golden Days of Tech are over

With tech layoffs entering a third year, and having friends and former colleagues being laid off left and right in my engineering circles, things seem pretty bleak.

I talked about surviving layoffs in the technology industry before in my blog, but let’s take it a bit further. I may sound like I am dooming, but it’s pretty obvious that the golden days of tech are over.

The days of coming out of a coding boot camp or college with zero work experience and making six figures at a big-name company are no more.

And chances are, if you’ve seen those day-of-the-life videos of tech influencers showing how little they actually work at their jobs, that won’t be happening to you.

It runs much deeper than the recent wave of layoffs stemming from the pandemic overhiring and overexpansion. As history has shown, I believe it is a reset for the whole industry. It is not merely the burst of a bubble like it did in 2000, but the start of a new normal.

From the 2000s up until the COVID-19 pandemic, the tech industry has experienced an unprecedented boom driven by years of historically low interest rates, innovation, and a strong overall economy. Many tech companies became household names. Countless riches were made by founding, working, and investing in tech.

The industry was also relatively new and good tech talent was scarce. People were getting six-figure job offers left and right.

It is the modern-day equivalent of the California Gold Rush. It was a unique situation and these economic and business conditions were never the norm. And I don’t think these conditions are coming back for a long long time.

Boom and bust cycles have been around since humans invented economics and trade.

Technologies and industries also boom and bust. At different points in human history, different industries experienced a grand boom followed by a monumental bust. It’s the basic business cycle.

Usually, it starts with an innovation, and investors pour money into it. Countless startups grow into big names. But once the technology and its industry become mature and less “cool”, less money comes in, innovation slows and the tech becomes stagnant. The big-name companies consolidate, absorb, and kill the competition. Eventually, people (and money) move on to the next best thing, and the technology and its industry fade away before another industry rises and takes its place.

Since the Industrial Revolution, we have seen entire industries boom and bust — from the steam engine to factories and manufacturing to nuclear power and now computers and the Internet. Some technologies and industries completely disappeared and became obsolete, while others faded into the background, becoming less prominent.

Software and tech today are no different.

Since the days of the first personal computer and the first Internet, we have seen countless startups and the likes of Microsoft, Apple, Google, Nvidia, and Netflix rise from the ashes and become household names. Silicon Valley became the new Wall Street and everyone was “Cali or bust”.

It is truly unprecedented — the amount of capital (mostly in the form of venture capital) that was available driven by historically low interest rates (especially since 2008) helped push a wave of startups to become household names, from Facebook to Snapchat to Uber to Airbnb. Companies were fighting for talent and new grads were getting paid well over six figures.

Many technologies have become household items, from personal computers to smartphones and social media apps. It truly changed many people’s lives and how we carried out our work and our communication. They had a profound impact on social dynamics and human relations, from socializing to dating and sharing resources. Entire new industries and business models (such as app/web development, ridesharing, and home sharing) were created and made people money.

This wave of tech was driven largely by social media, decentralization / cloud computing, artificial intelligence, and smartphones / mobile technologies. Before, there was the boom of the personal computer and the Internet.

However, with easy money drying up, tech giants consolidating, eliminating competition, and monopolizing the market, and interest rates looking to stay at a higher level permanently compared to the past decade, I believe we may be transitioning to a permanently slower state in the tech industry.

There will be fewer jobs (and companies) overall, and jobs will pay lower on average. Innovation and new products will slow down due to less funding and competition. A lot of unimportant or non-revenue-generating projects and teams will be cut. Companies will continue to reduce costs and consolidate resources through layoffs, outsourcing, and using artificial intelligence.

Tech, as an industry, has now finished the growth stage and entered the mature stage. It’s Business 101.

For years, tech giants have pushed for the Learn to Code initiative.

Although on the surface, it seemed like a charitable initiative to get people of all backgrounds to learn computer programming, it was an obvious attempt to increase the labour supply and lower the cost of labour. Supply and demand. Once more people know programming, and programming becomes a less specialized skill, companies can lower the pay for talent.

For a long time, there was a scarcity of talent in tech due to it being a new field. Working as a software developer carried the stigma of being a “nerd” and was seen as an “uncool” job.

However, that perception quickly changed as people realized how easy it was to crack six figures and get rich in tech, and tech became mainstream, fueled by shows like Silicon Valley, and driven further by social media.

Soon, computer science became the cool thing to do. Every high school and university student wanted to major in computer science, and everyone’s mom and grandma were learning programming, going to a coding boot camp, and trying to work at Google. People were abandoning their current careers to try to strike gold as software engineers.

Of course, the entry-level job market for tech quickly saturated. There was more supply of talent than the demand for programmers. Humans like to follow the crowd and take the path of least resistance, and it quickly shows.

Right around the pandemic was when things reached equilibrium — there were more qualified candidates than job postings, and the recent layoffs since 2022 only exacerbated that. There are simply hoards of highly qualified candidates fighting for the bits, and every job application I see on LinkedIn has hundreds of applicants on average.

Also, with the viability of remote work being proven by the pandemic, and more people in developing (cheaper) countries becoming competent in tech, why hire in North America when you can get the same quality of work done at a fraction of the cost in South America, Europe, or India? The job market has truly gone global.

Now, there are simply too many qualified candidates compared to the industry demand. The job market, at least at the entry to mid-levels, is completely saturated. The competition has gotten fierce and average salaries have been dropping like a rock. Jobs are also getting increasingly offshored and outsourced.

The tech giants and CEOs got exactly what they wanted.

Just like every other highly specialized career such as healthcare, business, law, engineering, or academia, I believe the barrier to entry for tech will only become higher, along with the educational requirements.

Jobs that used to not require a degree will not only require one, but eventually require specialized degrees (MS, PhDs) and relevant internship or project experience to even be considered. Just like medicine, law, finance, and academia, the majority of people will not make the cut and will never make it.

Also, longer hours and harsher working conditions will become the norm, just like most other highly-regarded professions (medicine, law, banking, consulting, etc.). We’ve seen it happen already in China with 996. I’m already noticing my peers at Big Tech pulling longer hours and taking on more work. More companies are also increasing internal competition and productivity via stack ranking, up or out policies, and harsher performance reviews (aka PIP) — typically reserved for banking or consulting jobs. “Rest and vest”, “cruising”, or whatever is a thing of the past.

Finally, with outsourcing and offshoring becoming more common as the quality of tech workers gets better abroad, the future of tech could resemble what happened to manufacturing and coal mining — jobs will continue to get offshored to cheaper countries and slowly disappear in North America.

In simpler terms, tech has now become a mature and mainstream career path, and will now see such a level of competition and requirements for entry. The easy times of breaking into the tech industry and making huge salaries while doing little work were an anomaly and were never the norm — it was simply due to it being a novel field with little competition.

However, not all hope is lost in the tech industry.

Tech is mostly up and well in most cases if you ignore the mass layoffs and cost-cutting. Countless people are still breaking into the industry or quietly working their tech jobs without being impacted by layoffs.

Well, by tech, most people are really just referring to the wave of tech giants and startups that grew big with the Internet, smartphones, and AI. Most college grads and people in online forums are laser-focused on getting into the select few software engineering positions at the most prestigious companies (think FAANG, big N) that are laying off the most employees, so they paint a bleak picture of the job market.

However, the tech industry is much bigger than that. Your local restaurant, the law firm or insurance company down the street, or the local shop producing car parts are also hiring developers. And countless companies, from local shops to large Fortune 500 companies, are always hiring IT specialists, web developers, cloud engineers, system admins, data analysts, or QA / testers. Yet, these workplaces are not nearly as glamorous and high-paying as Big Tech and don’t carry the “software engineer” title, so they often get overlooked, especially by college students and new grads.

And there will always be new technologies on the rise, from biotech to more advanced artificial intelligence to virtual and augmented reality, thus creating new industries and giving birth to new companies. I really believe biotech, neuroscience / brain-computer interaction, and advanced AI will spark the next big wave of tech. However, these new startups and products have to overcome the competition and the general stranglehold of Big Tech (look at OpenAI for example), so it won’t be easy.

As the world continues to digitalize and virtualize, software will continue to be developed, along with increasing hardware requirements, and the demand for software engineers and other tech professions will not go away.

What should you expect?

If you’re aspiring to become a software engineer, data scientist, or something similar, don’t give up your dreams, but be realistic about what you’re getting yourself into. It will no longer be the easy ride and easy path to a high salary that you were told by your mentors and parents.

The days of being a boot camp grad or college grad without relevant experience breaking into Big Tech and making six figures are long gone. There will be a lot more competition at every level, from university admissions to job applications. For the most prestigious companies, it will take someone truly exceptional to break in.

If you are a student or a career switcher reading this, don’t be discouraged, but you need to make a plan now. The competition at the entry-level will be fierce, and you need to do everything in your power to distinguish yourself — gaining relevant experience through extracurriculars, internships, competitions, and projects, networking, and learning the latest technologies.

Also, understand that many people will not make it. Just like medicine, law, academia, or high finance, less than 5% of candidates from school will make it in the end. Many people will be underemployed or unemployed for years before breaking in or giving up. And in order to break in, you have to be truly exceptional, especially the desirable companies and jobs.

Even if you currently have a job in tech, there will be more competition and turnover. From longer hours to harsher performance reviews (stack ranking or PIP quotas, up or out policies) to lower-level positions being more replaceable as companies continue to outsource, automate, and consolidate. There will always be someone out there who is willing to work harder for less money, so you always have be on top of your game.

You need to be ready to diversify your skill sets. Learning programming just for the sake of programming is no longer adequate — many people can code well, and lots of AI programs can write good code.

Programming, software engineering, or other tech jobs have one thing in common — problem-solving abilities. It is what I call the engineering mindset. It’s a mindset that cannot merely be outsourced or replaced by AI. Coding, machine learning, and data science are not the end to means but rather tools to solve problems.

Be open to solving challenging problems, learning new technologies, building innovative solutions, and jumping on new opportunities. You need to learn the skills and develop the expertise that sets you apart from the average entry-level developer.

Also, be proactive in learning on and off the job — most companies nowadays don’t hire entry-level or train their employees anymore and expect people to come in with the prerequisites and knowledge. Be proactive in learning new technologies and getting involved in new projects in and out of work. Don’t be a part of the death just because you didn’t want to learn and adapt.

Furthermore, instead of targeting generic software engineering jobs, try to become more specialized in certain fields which makes your skillset less replaceable by AI or outsourcing, whether it is business/finance, biology/neuroscience, or artificial intelligence/machine learning. Try to pair software engineering or data science with another domain (like supply chain, investing, fintech, etc.) and become an expert in the domain — ultimately, I believe programming is just a skill to solve another problem.

Finally, times like this are how new ideas and startups are born. Lots of recently jobless people come up with startup ideas. I believe innovation cannot be offshored. However, in times like this, startups are also risky (they have always been), and don’t be surprised if most of them fail.

Throughout history, during easy times and difficult times, there are always people who succeed. If you ignore what you are told by popular media and do the right things with persistence, you can succeed. The landscape of tech has been rapidly changing in recent years, but breaking in and thriving here is no more difficult if you are ready and know what to do.

Prologue

Yes, I did hear about unionizing tech workers and software engineers. Others mentioned putting new laws to restrict work visas and limit outsourcing. However, I believe these are only temporary measures to a much bigger problem, and won’t reverse the long-term trend.

Capitalism has always been the driving force behind our economic cycles and business decisions. Companies will treat people as resources and maximize their profits if the system continues to allow them to do so. Our globalized economy makes it easier than ever for businesses to cut costs.

As we have seen with American coal mining and manufacturing in the past, entire industries will be moved away to cheaper countries or automated if the costs justify it. Entire towns and cities have faded away from their glory days as the jobs disappeared (think the Rust Belt).

So always keep an eye out and look for your best interests. Corporations and businesses are not your friends. Your employer is not your friend, and you as an employee are as disposable as anyone. Loyalty is not rewarded in this day and age, and you should always take the better opportunities, whether you work in tech or any other industry.

And while it may sound like fear-mongering, don’t expect the tech industry to stick around forever, at least in North America. Don’t be surprised if most tech jobs in the US get moved to Asia or South America in the near future, just like manufacturing did decades ago. Be open to learning new things and exploring new industries. Stay ahead of the curve.