The technology industry cut 64,166 jobs in 2019, a notable 351 percent increase from 2018, according to a new analysis of job data by outplacement and coaching firm Challenger, Gray & Christmas. Concerns over the U.S.-China trade war, plus shifts in consumer habits, may have driven a significant percentage of those layoffs.
“The sectors with the highest number of cuts this year were all dealing with trade concerns, emerging technologies, and shifts in consumer behavior,” the firm wrote in a note accompanying the data. But even a higher rate of job cuts hasn’t stopped “a lot of hiring activity in these industries.”
In other words, it seems many of these job cuts are the result of businesses trying to reposition in order to adapt to industry changes, rather than slicing positions in order to make it through hard economic times. Indeed, across all industries, restructuring was cited as the most-common reason for job cuts (ultimately culling 137,968 jobs), followed by trade difficulties (11,688 cuts) and tariffs (5,881). That being said, bankruptcy also remained a major factor, with 62,136 announced cuts in 2019.
Last year, the tech industry saw some of its shiniest “unicorns” falter and even implode. For example, WeWork (which critics argue is actually a real-estate company that pretends it’s a hot tech startup, but bear with us) planned to cut thousands of workers after its IPO melted down. In November, WeWork’s executive chairman, Marcelo Claure, suggested in an email to employees that these layoffs would make the firm “stronger and better able to generate even more opportunities over the coming months and years,” but the company’s future is ultimately uncertain.
Meanwhile, Uber laid off hundreds of employees from a number of divisions, including its Advanced Technologies Group and other tech-centric teams. The ride-sharing company is still trying to recover from a few years of messy internal and external crises, capped by an underwhelming IPO.
Well-established companies also cut jobs in 2019; for example, AT&T is reportedly in the midst of sweeping layoffs (according to Axios), replacing full-time workers with contractors in some cases.
As we head in 2020, the tech industry’s unemployment rate remains low, but that doesn’t prevent companies from cutting jobs and even whole divisions if they feel the need to “pivot” their current strategy. It always pays to keep your skills up-to-date… and to give your résumé a good polish, just in case.