For Seattle, layoffs on Amazon, Meta, and through technology are a mixed blessing

With tech layoffs increasing week by week – including up to 10,000 on Amazon, according to a media report – Seattle area workers and employers face a heavy economic issue.

Are the cuts a temporary adjustment to a post-pandemic slowdown? Or has an industry that almost single-handedly fueled the Seattle area’s economic boom over the past decade has finally peaked?

Either way, the layoffs have pierced the Seattle area’s image of the tech sector as unstoppable.

“I think it definitely has an effect on the psyche,” said a Seattle Amazon worker, referring to a New York Times report that the company is considering about 10,000 layoffs. The worker, who asked not to be identified because not authorized to comment, added that staff are still waiting to know if the reported layoffs are ongoing and which teams would be affected.

Amazon did not comment on the Times report or a similar Wall Street Journal report Friday. But the cuts, if confirmed, would be just the latest in a series of layoffs and hiring freezes in the Seattle-area tech sector.

Microsoft, Twitter, and Redfin have all recently made cuts or plan to cut the Seattle area workforce. Facebook parent company Meta’s plans to cut 726 locations in Seattle and Bellevue were confirmed Monday by the state department of job security.

Economists say the recent layoffs were likely inevitable.

After enjoying tremendous growth in demand during the pandemic, many of the biggest tech players are now grappling with a return to more normal demand alongside the impact of higher interest rates and the looming threat of recession.

“It’s not necessarily surprising that some of that demand has declined and wasn’t necessarily sustainable over the long term,” said Anneliese Vance-Sherman, a regional economist with the Seattle-area Labor Safety Department. . “And here we are.”

Some tech companies have accused the housing market of cooling cuts. Seattle-based Redfin, a brokerage and listing site, announced this month that it would lay off 862 employees nationwide, including 75 in Washington, and close its house rollover business. This followed an earlier 470 job cuts nationwide in June. Redfin employed around 6,500 workers at the end of last year.

Economists and other market pundits warn it’s too early to know whether recent layoffs herald a broader slowdown in the tech sector, which was adding thousands of jobs per month as of September, according to state data. And many of the recently announced layoffs won’t show up in the state employment data for several months.

More broadly, despite the scale of some recent layoffs, all the job cuts announced so far represent only a small fraction of the region’s tech workforce. State data shows more than 160,000 workers in Seattle-area companies and more than 190,000 statewide in information technology-focused companies.

Amazon alone had about 75,000 workers in the Seattle area in 2021, up from 53,500 in 2019, said Jacob Vigdor, an economist at the University of Washington Evans School of Public Policy, who follows state and local labor markets.

“The most surprising thing about Amazon’s firing [report] it’s how small that number is in relation to what has become the giant size of the company and its rapid growth, ”said Vigdor. Even if all of Amazon’s reported 10,000 layoffs were confined to Washington state, Vigdor said, “it would only set the local staff count back about a year.”

A slowdown in hiring by Big Tech could also be good news for some smaller tech companies that have struggled to compete for tech talent in a job market that remains extremely tight.

“Having a large talent pool is always an opportunity for us,” said Corby Casler, spokesperson for Redmond-based business technology firm Denali Advanced Integration, which plans to add 25% more staff in each of the next five years and hired more than 200 last year. “We are growing, hiring and we believe that layoffs are a mistake.”

This opportunistic attitude is echoed by many non-tech employers who also need tech talent to manage the growing digital parts of their operations.

“If these tech companies retire, I’d like to hire some of their employees,” said Brent Beardall, CEO of Seattle-based WaFd Bank, who sees a similar appetite for tech talent in local companies that aren’t traditional tech. space.

The current layoffs have attracted a lot of attention because these are “companies that you traditionally associate as a forefather of the tech industry, but the tech industry has expanded far beyond those tech giants,” said Megan Slabinski, who oversees regional hiring. for technology, marketing and creative roles with recruiter Robert Half’s Seattle office.

As painful as layoffs can be for individuals, Slabinski added, “releasing some talent to the market isn’t a horrible thing because the demand is still so high.”

This is already showing up for some tech workers.

The fired employees of Twitter and Meta, for example, have created online groups to connect with recruiters and get leads on job opportunities. So far, the opportunities come from small and medium-sized businesses rather than Big Tech, according to a fired Twitter employee, who has asked for anonymity because they are looking for jobs in tech companies.

“Companies you would expect to call back like Apple or Microsoft seem to be holding back,” they said, “but companies like Remitly or Shopify are actively hiring.”

However, Slabinksi and other industry observers acknowledge that the Seattle area job market isn’t what it was even a year ago.

While there are still plenty of opportunities for engineering, security, networking and cloud computing jobs, employers may not feel the need to make the kind of “ridiculous” compensation offers they did in previous years, Slabinksi said.

Employers may also feel less pressured to allow so much remote work, says Josh Wong, a recruiter manager at Addison Group, a professional services firm with offices in Seattle.

Some recruiters also think hiring could slow or stop altogether at local tech startups, partly when their investors pull out.

For the tech workers themselves, this creates a lot of uncertainty

“I think it definitely has an effect on the psyche,” said the Amazon worker, who added that staff were still waiting to know if the reported layoffs were in progress and which teams would be affected.

While the total number of layoffs remains small compared to the broader industry, they’ve already been enough to blunt the sense of unstoppable momentum that many Seattle tech workers took for granted even a year ago.

On Twitter, where entire teams have been wiped out with layoffs, those who are left are trying to leave, the former Twitter employee said.

But in other companies, Amazon news fueled a growing sense of caution among workers who in some cases had only known steady growth and endless opportunities.

At Google, an employee of the company’s Seattle cloud operation said that colleagues who used to regularly scan other companies’ openings now seemed more focused on maintaining their current role.

“I’ve heard some people say, ‘OK, you know, I’ll try harder with my current job,'” the employee said.

Seattle Times reporter Heidi Groover contributed to this report.

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