I get this question often, and it’s an important one for many job seekers and their families as they struggle in the toughest job market in recent memory.
For many years, the Tech industry has been a beacon of opportunity. It’s provided not just technical professionals but also non-technical workers with lucrative and fulfilling careers, livelihoods, and communities. These non-technical roles, from marketing and human resources to product and project management and customer support, have allowed millions to build stable and prosperous lives supported by so-called Tech company jobs. It was not unusual for non-technical roles in Tech to command annual salaries of $90,000 to $130,000. These salaries were well above the national median. They were high-paying jobs that allowed workers and their families to thrive and build communities in some of the nation’s highest-ranked cities in terms of cost of living. It was great while it lasted, but as the industry undergoes rapid transformation, the landscape for employees is shifting dramatically.
The once plentiful job market has become increasingly competitive and scarce, signaling a potential end to an era of widespread non-tech employment within the Tech sector. As is often the case, California’s Bay Area, the epicenter of big Tech in the US, is leading the way. The factors influencing this shift are multifaceted, involving economic changes, technological advancements, and evolving work dynamics. I want to explore why Tech company jobs, particularly non-technical ones, while unlikely to disappear entirely, will become scarcer and more competitive as part of a trend that is unlikely to reverse.
Recent Layoffs in the Tech Industry: Probably More ‘New Normal’ than Cyclical
In case you’ve been asleep under a rock and haven’t noticed, the Tech industry has recently witnessed massive layoffs. Many shiny employer brands have downsized sharply. According to Crunchbase News Tally, in 2023, more than 191,000 workers in U.S.-based tech companies were laid off in mass job cuts, and in 2024, an additional 98,000 workers were cut as of this writing in June. Looking more closely at the roles that took the biggest hit at companies like Facebook, Google, Microsoft, Amazon, Apple, and Twitter, they were managerial and non-technical staff. These layoffs are not just a response to economic pressures. They also reflect a strategic shift towards the sector becoming leaner by prioritizing technical roles directly tied to product development and other core company functions.
The Changing Ratio of Developers (Engineers) to Non-Developers
One of the most telling indicators of the depth of change comes from data analyzed by Adadot, a developer productivity platform. By integrating internal communications data from platforms such as GitLab, GitHub, Slack, and Google Calendar, Adadot analyzed 38,000 developer datasets at tech companies. Their findings revealed that in 2021, the ratio of developers to non-developers was about 1:3. For every developer, three non-technical staff members supported the sector. At the beginning of 2024, it was closer to 1:2, a massive reduction of almost 40%.
The End of ZIRP and Rising Interest Rates
We are witnessing a “New Normal” rather than just a cyclical factor, but a crucial cyclical element is at play nonetheless: established Tech companies and startups alike are adjusting to the end of a long era of cheap money, known as ZIRP, or Zero Interest Rate Policy, lasting from roughly 2008 to 2021. The sharp change in interest rates has had profound implications for the Tech industry. ZIRP created an environment where capital was cheap, allowing and, in many cases, compelling Tech companies to invest heavily in growth, often hiring many technical and non-technical staff to support large strategic expansions on all fronts.
However, starting in 2022, the rising interest rate regime significantly increased the cost of borrowing, forcing companies to adopt starkly more conservative financial forecasts and fiscal strategies. This shift means less investment in large, diverse teams to support growth and a greater focus on core technical competencies required to run the company’s core business. Despite interest rates being cyclical with the economy, the ratio of technical to non-technical workers seems unlikely to revert because of more stable and profound technological and societal shifts.
AI-Enabled Automation
Artificial intelligence (AI) and automation are revolutionizing the Tech industry. Many tasks that were once performed by non-technical staff are now being automated. Customer service roles are being replaced by AI-powered chatbots, sales processes are increasingly coordinated by automated systems, and management tasks are streamlined through AI-driven analytics and recommendations. This trend is reducing the need for non-technical roles and increasing the demand for highly technical professionals who can develop and maintain these automated systems. While AI won’t entirely replace any roles or functions in the near future, it is already enabling companies to accomplish much more with far fewer employees, and we fully expect that this trend will only accelerate as the technology develops and becomes better integrated.
Remote Work
The rise of remote work has massively expanded the talent pool for Tech companies. With the ability to hire from anywhere nationally (hiring globally is riddled with tax and HR compliance complexities), companies are no longer limited to local talent. This increased competition means that both technical and non-technical roles are now being filled often at a lower cost by the best candidates nationally. As a result, local job seekers have fewer opportunities, especially in regions with a higher cost of living and accompanying salary requirements. The increase in remote work is especially sharp in Tech and Finance, where so-called knowledge work is easiest to do remotely is most prevalent.
Smaller Headcounts, Greater Efficiency
Led by some of the best-known companies in the sector, many employers are discovering that a leaner workforce can be more agile and adaptable in a rapidly changing market. Fueled by the necessity of scarcer capital, many employers simply find ways to do more with less, unsurprisingly cheered by investors, if not employees. By leveraging advanced tools and technologies, smaller teams can achieve the same, if not more, as larger teams did in the past. The efficiency gain diminishes headcount and leads to a general flattening of the organizational hierarchy as a reduced workforce needs fewer managers to coordinate the work. Managers not directly tied to core business functions are especially vulnerable, being the first to go and the last to be replaced.
Conclusion
The tech industry is fundamentally transforming and is driven by economic, technological, and operational changes. The future of tech employment will likely focus on a leaner workforce that is heavily reliant on technical skills and supported by automation. Non-technical professionals must adapt to this new reality by seeking ways to upskill and remain relevant in an increasingly automated and competitive job market.
What will become of the boom town communities that have grown around the Bay Area and other Tech hubs? Many historical examples come to mind, from Detroit with its auto industry to the original rush to California’s Bay Area fueled by gold prospecting and hype. Some have taken decades to recover, while others may never see their former glory restored. As the Tech industry continues to evolve, the individual livelihoods and communities built around it must also adapt.
Ultimately, the future of Tech workers and the communities surrounding them will be shaped by how well we anticipate and respond to these changes. We must stay informed, adaptable, and proactive to thrive in a rapidly evolving job landscape. We must also be strategic about the investments we make with our time and resources and adopt new technologies to do more with what we have. Most importantly, we must shift our attitudes and expectations from shock and resentment to acceptance, recalibration, and personal and professional innovation. Learn new ways, try new things, and build ourselves to better fit our new reality because the good old days aren’t coming back. We must change to prosper in the good new days ahead.
A little more meat for the skeptics:
- You might think, “He’s wrong! Those jobs will come back …it’s all cycles.”
- My responses:
- Maybe, but the smart money is on the side that says they won’t. In the first four months of 2024, American VC firms invested $18.3 billion in AI startups, which is more than 20% of all US venture dollars across categories. They are betting that AI will become very useful to businesses in the United States.
- Depending on how broadly one measures remote work today (April 2024), while down from its pandemic peak, it is 350% above what it was in 2019. See this great article by Tim Smart of U.S. News and World Report that compellingly argues that Remote Work Has Radically Changed the Economy – and it’s Here to Stay
- My responses:
- You might think, “Yeah, well, he’s just talking his book”
- My response: Well, yes, that’s true, but that’s why we made Jobalope. We want to help people adapt by building tools for them to become better resume and cover letter writers, better applicants, better interviewers, and, in short, better job seekers. We think there is a real and growing need for these tools, and we want to be the best in the world at building them. We want to have the most positive impact we can have in helping us all adapt to the new normal.
