There’s a whole generation of tech employees that have never seen a down market. All indications are that these folks are woefully unaware of what’s on the horizon now.
It’s going to be all about cash flow. If you’re burning cash and not making much of it from operations then it’s going to be a bumpy road ahead. Buckle up.
>There’s a whole generation of tech employees that have never seen a down market.
Indeed. I lived through both the 2008 financial crisis and the 2000 dot com implosion (also graduated high school and went off to college right during the 1991 recession). People who entered the job market after 2015 and know nothing except recruiters constantly hitting them up with mid six figure+ job offers are in for a rude awakening IMO.
Save money and have enough to live on for awhile. If you don't have savings then immediately cut your cost of living down. If you do lose your job then don't just accept anything (remember, you have savings + unemployment + severance to live on for awhile) and use this time to sharpen skills and learn new things. Make yourself more valuable.
I can't see the future but I don't think it's going to be a bloodbath like the .com crash. Engineers in particular are valuable assets for a company and expensive to recruit. Expect companies to cut back on perks and possibly raises for awhile if it gets bad. But I don't think we're going to see massive layoffs across the board.
There's still a ton of money in the VC world. They just aren't spending right now.
> "I can't see the future but I don't think it's going to be a bloodbath like the .com crash."
The world has gone ever more dependent on tech since then. Tech is used everywhere now, pervasively.
They're not re-introducing cash in cash-free economies. People aren't going back to carrying physical documents around and stashing them in high cabinets. Shopping online has only gotten more popular. Hanging out online, too. Agriculture, warfare, industry, you name it... it's not all "Uber, but for %s" out there. Somebody has to keep the lights on, right?
> I can't see the future but I don't think it's going to be a bloodbath like the .com crash.
I agree. I've went through .com and the gfc, and key to both times was to make sure the company I was with was making money. While I think tech will see downward pressures on salaries, each company will be in a different situation. For example, if you're in a company that needs a runway, assume it may get cut short at any time. I expect the big techs who are making money to start scooping up some of the people cut from VC companies which is where the downward wage pressure will come from.
The other side that is very different from both .com and the gfc, is that engineers are seen as assets even outside of tech companies now. Almost every company views tech as a competitive edge, and that is simply not going away. Salaries may level off and/or pull back some, but there is too much technology deployed to stop hiring completely.
the entire point of large scale technological literacy is to replace the tech sector. no web app you write is going to be more useful to an organization than an administrative staff that just knows SQL and can use it on the fly for queries, reports, and analysis. software developers are working against the tide: think about how much simpler dev tools are than user tools. as users become more sophisticated then you expect them to need simpler rather than more complex tools.
"as users become more sophisticated then you expect them to need simpler rather than more complex tools."
That sentence seems inherently contradictory.
...and yet all the stuff being built by and large makes users less sophisticated as consumers and their 'technological literacy' questionable. At no point in the last 3 decades, and no one moving forward currently, has shown any interest in making the masses use SQL for anything at an administrative level, and users have shown ever less interest in how any of the tech works, or what it can do, as long as it fulfills whatever prima facie use case they care about.
enterprise software isn't built for users, it's built for the upper level administrators who contract the software, and for the amusement and profit of the engineers who are paid a large multiple of the salaries of any of the people who will be forced to use their systems and consume their ads at work. the result is developers getting paid a lot, not improving anyone's life, and then spending their earnings on our labor time, when we become available as food service workers, sex workers, and so on. the categories of technical competence and social awareness are not supposed to intersect.
as a developer you know perfectly well that as you become more sophisticated you can do much more using much simpler tools.
i don't think you people have any idea of the kind of environment into which your software is deployed. you're mostly happy to ship any crap that will superficially justify the infinite expansion of bloatware that you get paid to produce.
"enterprise software isn't built for users, it's built for the upper level administrators who contract the software, and for the amusement and profit of the engineers who are paid a large multiple of the salaries of any of the people who will be forced to use their systems and consume their ads at work."
That might be generally the case (and certainly historically true) but that has been changing for the last decade (disclosure, I worked in CRM for a decade and that was very much position taken internally, "focus on actual users at least as much as any upstream stakeholder" especially as mobile started to really take off).
"the categories of technical competence and social awareness are not supposed to intersect."
Not supposed to, or avoided by certain folks in order to expand a customer base to the biggest L in the LCD acronym possible?
no, it's not changing, i'm sorry to say, and thank you for your disclosure, but i'm afraid you are not in a position to see the problem clearly.
not supposed to, as in, a majority of industry stakeholders have (apparently, based on their behavior) strong motivations to mystify technology to themselves and others, to represent maintenance as innovation, and so on, because disruption and innovation are the standards we've set for ourselves.
in the meantime, we have such disasters happening as js-dependent archive.org. how can this be tolerated?
i certainly believe that your company's internal position was to "focus on users" but the truth is that managing the flaws of overengineered systems in practice takes up a huge amount of administrators' time, and they develop no competencies as a result, so it is pure wasted time. most of them have no idea that there exists a relatively simple language for looking up student data. no one has ever told them "there exists a simple way of saying 'give me a list of all the students who failed calculus last year'" or whatever. lots of them still have to navigate ancient terminal applications, and all the people who could theoretically be helping these organizations reorganize themselves and use technology better are making very big salaries just selling them overengineered software instead.
since the software is bloated and breaking the web, the organization also ends up upgrading its hardware frequently, so all the ancient contracts with dell and cisco and whatever keep grinding, and as a result video games look prettier and the military has more targeting computers and surveillance devices, and the developer class gets paid to… what? invest in real estate, vr equipment, and an illusion of progress?
"i'm afraid you are not in a position to see the problem clearly."
Actually I am. I've worked both sides of the problem (and in that regard I agree its a problem), and see deficits on both, hence a different opinion, but thanks for the condescension and presumptive dismissal, as I now know about what further effort to devote to this conversation, which ends at the following period.
> I can't see the future but I don't think it's going to be a bloodbath like the .com crash
I think you're right, but I also think that we'll see a more general downturn than the .com crash was. Most people outside of tech didn't feel the .com crash. I suspect we're in for a recession that's closer to the '08 crash which means it's going to take a while to come back.
> If you do lose your job then don't just accept anything (remember, you have savings + unemployment + severance to live on for awhile) and use this time to sharpen skills and learn new things.
This is terrible advice. An employment gap will make you radioactive to hiring managers during a recession. Even a terrible job will keep you in better standing for negotiation.
It could be but I’m not sure. Your CV displays your pedigree much like the name of your university. You’ll also be very unhappy just jumping into a bad situation you are not enthusiastic about.
I’d rather have a 4-6 month gap than taking on a bad job right away.
But you do have a valid point that it’s easier to find a job when you have one.
The standard 6 months of emergency fund, updated resume and just go about your life as normal. If you are a software developer, you'll be fine. Maybe it'll take you 3 months to find a new job rather than 1 month. Don't let fearmongering on forums and especially the news affect you or force you to make rash decisions.
3) Prepare to hunker down at your current job for awhile (lose the job hopping mindset for the time being if you have it)
On the other hand, consider that the time immediately after a recession passes can be a great time to do something new, start a business, etc. as you will be getting in early on the next business cycle.
> 3) Prepare to hunker down at your current job for awhile (lose the job hopping mindset for the time being if you have it)
I just got a pretty good offer and I don't know what to do - I am a bit worried I will be the first to be downsized if things go south. The company seems to be doing well and has IPO'ed so there's that.
On the other hand no one can guarantee that my current startup won't struggle in the coming year or two.
I think you hit on the two key points. LIFO is definitely real, and the last to be hired are often the first to be fired. OTOH, you have to look at the financial stability of the new company vs the old, if the newer is on substantially better footing it may outweigh the LIFO effect.
I saw the dot com bubble burst, and then made it through a round of layoffs in early 2k, and again near 2008.
I saw people lose their homes, go bankrupt, and end up in bad positions. It really scarred me, to the extend where I won't work at a company that doesn't actually make something of value, or doesn't have an existing line of profit. I don't consider stock options when taking a position, since it's very rare they actually end up being worth anything significant, even with a buyout. I live well within my means so I can take a salary that's 1/2 and be ok, if needed.
But, as the counter, you could easily, and rightly, claim that this has caused me to not make a significant amount of money by taking these less risky positions. Those risky positions pay more because they are risky, and everyone knows it.
I wonder, what's the age/tenure distribution like in FAANGs these days?
I vaguely recall a factoid from a recruiter during a round of interviewing at Google about 15 years ago, where some crazy percentage of the current employees had been fresh-from-college hires in the last 2-3 years. I understood there was some churn in the valley, but could not quite imagine how many were fresh hires from school versus more senior folks on their next stint.
In the dotcom boom in Canada there was a sub-boom in fiber optics and related stuff in the Ottawa area. Nortel et al were hiring and paying big salaries right out of school, and people got used to it and thought that was how much money they could earn.
For years afterward there were people who had mentally anchored themselves at a certain salary bracket that couldn't find anything (especially in Ottawa) that paid anywhere close.
I always assumed this will happen any time with machine learning, I don't think it will be as bad for software overall though.
I've heard the argument that the dotcom crash was so catastrophic because the Internet as a market wasn't proven at that point. That'd mean a dotcom like crisis is the lowest point this industry can reach. Which in some way is reassuring.
That was a factor, but more fundamentally it was companies with wild valuations and no realistic prospects of becoming a profitable and self-sustaining business. There is some of that out there right now. Market corrections exist in part to flush those companies out of the system.
Some of that? There are a lot of companies that raised 20m+ without any hope of ever paying that back and actually heavily depending on new rounds of funding to survive at all. This was all wrapped up as ‘pump everything in growth’ which works as long as it works and that was no different in 1999 when companies were also just buying users (one of my clients at the time gave away free groceries the first month of your membership; guess what the retention was after that month) with investor money. When that dried up, all users left in a a few months and the companies were gone. This will happen again. Everyone I know (business and personal) uses a lot of freemium services from startups they will never pay for; they will simply leave the second they have to pay or when ads appear. And that has to happen for these companies to have a chance at all.
Not sure that follows. If (big "if") interest rates go up a lot, then a lot of investors might not reach for VC or PE to enhance their returns at even close to current allocation (and growth would be heavily discounted).
Look at how the telecoms industry looks now compared to the heights of 2003 or so.
It's not a "big if" at all. Zero nominal rates and negative real rates are an anomaly in economic history over the last few centuries. Rates are headed higher, much higher. The Fed has been holding off in the hope that inflation would be "transitory" but it's now been a year and a half of >7% CPI increases with no sign of abating.
I'd still argue there is sizable "if" as one way to reduce government debt would be to use inflation (just like in the 1950s). So while rates will go up, the question is how much they will go up and if the level they reach will be high enough to cause substantial portfolio reallocations.
Agreed. It's not only government debt - everyone is indebted (people, businesses) at a historical high. How much can you raise interest rate without crushing them I don't know.
On the other hand how much can you let inflation go up without crushing the working class and emerging markets indebted in USD?
It's an impossible situation.
What happened in 2000 was that interest rates got up and money became scarcer, so there was nobody willing to put any money into more risky investments like VCs.
Today we are in a completely different realm of money availability, but it is becoming scarcer again.
It’s going to be all about cash flow. If you’re burning cash and not making much of it from operations then it’s going to be a bumpy road ahead. Buckle up.