Tech Layoffs: The Nude Awakening
How to embrace this opportunity and play a different kind of game
Wait, do you mean..rude? Or, you might possibly mean crude? No, you read it right my friend, nude.
As in stripped of your royal robes down to your shiny birthday suit. Or, in the case that you just got laid off, then it probably feels more like a birthday suit dragged through the mud with prickly burs all over you. Speaking from personal experience (this month marks my Layoff-aversary).
The wise Warren Buffett once said,
“Only when the tide goes out do you learn who has been swimming naked.”
Needless to say (but saying it anyway), my first thought goes, “Is that supposed to be a bad thing?”
Whether it’s good or bad depends on the viewer. What Warren Buffett really meant was this:
In the financial sector, when market conditions are favorable, it's easy for companies and investors to look good or be successful, even if their financial health behind the curtain isn’t solid. But, when the economic landscape becomes challenging (the tide goes out), those who weren’t prepared or were taking excessive risks (swimming naked) are exposed.
This metaphor doesn’t just apply to financial markets. It's a candid expression that describes what happens when previously hidden truths are finally revealed. Sobering truths. Major ones. The kind that expose the capitalist system, companies and individuals down to their core . You find out who’s been playing the respectable game of preparation and resilience vs those that’ve been playing the zero sum game of perception.
We’ll come back to this. For now, let’s take a look at the job market situation.
According to layoffs.fyi, over 50,000 employees have been laid off so far in 2024 AND we’re only in March.
From the data, it seems like the Tech sector must be an outlier. The Labor Department’s Bureau of Labor Statistics shows an increase of 275,000 US jobs for the month of February.
Well why is this happening?
The name of the game right now is profitability. Prior to this shift, investors have rewarded companies who exemplified the “growth at all costs” model (which only exacerbated during the pandemic as the need for tech solutions surged).
But as interest rates have increased, money becoming more expensive to borrow, fear of recession and inflation pain, the new rules have changed how companies play–turning the landscape into its own version of Hunger Games.
So here’s the first sobering truth:
Humans are expensive to employ.
Depending on the role, the hiring process takes 3 to 6 months, the onboarding process takes 6 months, and the average US tech worker takes 2 to 4 weeks of vacation (which is quite generous for US standards and simultaneously sad for global standards). Companies also have to offer employees benefits. That’s a great thing! Also, very *ahem* expensive.
This leads to the next truth. If companies hire humans, then..
Humans have to be treated like humans.
And if they aren’t, they can burnout which compromises productivity, efficiency, and company morale. Humans can also sue companies which isn’t fun for anyone (unless you’re Saul Goodman, then idk)
Overall, this can be a tough thing for large tech companies managing their profit/loss balance sheet with increasing pressure for high performance aka profitability.
But as you can see below, private equity firms often reward tech companies for the impact layoffs have on their balance sheet:
How does this work? In simple terms, when you layoff workers, you cut costs, when costs are lower, you get to keep more revenue, you increase your margins and therefore, profits.
Just to be clear, this isn’t a vendetta against tech companies. There are obvious truths we must come to bare (or is it bear? I feel more like the latter! 🧸). Yes, there is no loyalty within companies anymore. We all function as a cog in the machine. Tech is still a volatile industry.
Now, the focus of this essay isn’t to harp on the dark side of Corporate America and beyond.
Rather, it’s to focus on what humans can do now as a response to the phenomenon we’re experiencing.
To clarify, the phenomenon that we’re all witnessing is the beginning of a new era of a labor market where..
The best employee is no employee.
In Sam Altman’s words,
“AGI is basically the equivalent of a median human that you could hire as a coworker. And they could say do anything that you’d be happy with a remote coworker doing just behind a computer which includes learning how to go be a doctor, learning how to be a very competent coder. There’s a lot of stuff that a median human is capable of getting good at.”
Experts argue AGI will be achieved in as little as 5 years . While others including Elon Musk argue it’s already here.
Either way, we are on the cusp of an AI revolution.
There’s a lot to unpack here. And we can save it for a future article.
But back to the present moment, what does this mean for us humans? (Promise there’s a silver lining!)
Besides all the tactical stuff (learning about AMT tax if you’re exercising stock options, COBRA health insurance, etc), here are my suggestions if you’ve been recently laid off or you’re part of a company that’s been affected:
1. The #1 Priority Is Mental Health.
First and foremost, those who have been laid off and their families will be affected. You don’t have to do this alone! I want to encourage you to seek support whether that be a mental health professional, career coach, and/or a community where you can share your grievances be validated in them. Humans are social beings and we need each other to not only survive but to thrive.
Also, the coworkers closest to recently laid off employees. Although AGI is all the buzz right now, we’re not quite there yet. For most companies, layoffs mean those who weren’t sacrificed on the cutting board must take on the workload of those that were. More responsibility and more work means more stress, less time for personal growth and development, less time for self-care. My guess is burnout numbers will increase beyond the current rate which is already staggering.
2. Don’t Take It Personally.
As hard as it is to not flip the bird at your now previous employer (it totally makes sense if that’s the 1st, 2nd, 31st reaction), consider this: when the mental dust settles, you can see things with more clarity. The fact that you were laid off has NOTHING to do with your self-worth. You might understand this intellectually but that doesn’t mean you’re a robot. The flurry of emotions that come with being let go can feel like rejection. I’d imagine you felt frustrated, angry, and disappointed as you resisted the urge to chuck your monitor over the 5th story balcony. That’s human. Embrace your humanity and find healthy ways to express your emotional life through support (mentioned above).
3. Do NOT Rush Into the Next Gig (if you can afford it).
Take some time for clarity. Let the flying-sediment-smacking-you-in-the-face settle. Sometimes, our survival mode kicks in to find the next job and this makes sense if you’re supporting a family or in dire financial need. But let’s say you’re if you have the cushion of a solid severance package and savings (which companies with any morsel of integrity should be doing), consider a Sabbatical which you so deserve! Another job won’t change your life but perhaps taking some time away from the grindstone might.
Go snorkel with the Dolphins, “Wim Hof” your way up Mount Everest, or embark on a culinary adventure through the bustling streets of Saigon (may I suggest having Pho for breakfast? 😉 ).
I get it. Layoffs suck. But it isn’t the end of the world. Or actually, if you choose, it might be the beginning of a whole new one.
For many of us, getting laid off can be a beautiful thing. Personally for me, it was profoundly liberating. It’s the most alive I’ve felt in years. After 12+ years in what many would consider a successful career in tech, for the first time in a long time, I felt my spirit ignite with call for adventure. A small taste of freedom can go a long way.
We’ve had this identity of working in the prestigious tech field for so long—that we forget the difference between the tech identity we wear and our own skin.
The company logo, the fancy role, the attractive comp package (aka golden handcuffs)—none of it defines us. It’s tricky. The cushy job can put you into a weird sort of trance—the kind that convinces you that your previous life force energy is worth giving up in trade for money. The kind that keeps you from taking exciting risks yet torments you with regrettable “what ifs.”
Each and everyone of us has that wise inner voice that speaks to us when we’re not doing what nourishes our souls.
That inner voice says:
There’s more to life than just..this.
It’s time to see that with 4K clarity. Only then can you really see the layoff for what it’s really worth: a golden opportunity to go naked. To bare it all. Au naturel. Rebirthed into the world again with a renewed sense of purpose.
In other words, you can reinvent yourself. Because there is zero obligation to commit to a binding contract that locks you into the corporate world. When you come to this realization (as I have), you can really embrace this wild experience as an opportunity gifted to you.
As Yuval Harari says,
“AI is not even near its full potential; it’s just in its infancy. We haven’t seen anything yet. So, every 10 years, you are likely to lose your job or your job is going to be completely transformed by the new wave of the latest machine learning wizardry. And if you want to stay in the game, you will have to basically reinvent yourself — and not just once, but repeatedly.”
It’s not an option. It’s a necessity.
We need to develop the skill of reinventing ourselves.
In the context of our careers, it’s how we make money, how we reach fulfillment, and how we become a contributing member of society.
So, here’s your opportunity. You can shed the corporate layers you’ve worn for so long and feel more liberated in your own skin.
This doesn’t mean you never go back into tech. There’s nothing wrong with a predictable salary and benefits—which has their own charm in a weird way. But, if you’ve been dreading getting up every morning to just zombie walk your way to yet another boring Zoom call about who-cares-what, then this could be the wakeup call you’ve been waiting for.
It’s the possibility you could play an entirely different game. One with more freedom, more excitement, more adventure.
However, this new game requires you to enter the void where the possibilities are limitless. It’s the realm of uncertainty that can be pretty freakin’ scary. But, it can also be totally worth it.
As poet Mary Oliver says,
Tell me, what is it you plan to do with your one wild and precious life?
There you have it. It’s time to embrace your nude awakening.
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