The tech meltdown comes for Gen Z
It marked a high point for Dang, who had come a long way from her home in Vietnam. Here she was at a glitzy party in the world's most glamorous city, preparing to start a job at a company whose mission she truly believed in. She had made it. But she was also nervous. The tech industry was teetering, and she wondered whether the future she had banked on would survive. "I was really worried, seeing the layoffs at Amazon and Meta and a lot of the small startups," she recalls.
It turned out Dang was right to worry. In the new year, the company laid off a swath of its staff and called to tell her it was delaying her start date indefinitely. For Dang, who's attending school in the US on a visa for international students, it wasn't just the loss of her dream job — it meant she now faces the prospect of having to leave the country. If she doesn't have another offer by the time she graduates in three months, she'll have to return home to Vietnam.
As Silicon Valley slashed some 100,000 jobs in the past six weeks in repentance for its pandemic-era hiring binge, much of the focus has been on those who suddenly found themselves out of work in the middle of their careers. But the hardest hit have been those who have yet to break into the industry: the college and graduate students who dreamed of getting lucrative tech gigs once they completed their degrees. On Handshake, a leading jobs board for college students, entry-level software positions in the tech industry slumped 14% last year. And the few openings that are being filled right now tend to be highly specialized engineering positions. "With budgets tightening, companies are focused on finding the right talent for specific roles, and more often than not that's a senior-level person," says Zuhayeer Musa, a cofounder of the tech salary site Levels.fyi.
The job prospects in Big Tech are so grim that career counselors at even the most elite universities are urging students to consider positions at smaller companies and in less sought-after sectors, such as manufacturing or government. "There are still plenty of opportunities, and we try to get students to focus on how their skills can be used in other environments," says Sue Harbour, the executive director of the career center at the University of California at Berkeley. "It's typical of students in a top school, and particularly a top engineering school, to always want to seek out the best company. That's the part we're having to work with students on — not lowering their expectations, but adjusting their expectations."
Several top-ranked engineering schools told me that many Big Tech giants had been noticeably absent at their careers fairs since September. That means the competition for the few remaining positions is fiercer than ever. "There are so many other new grads still looking for a job, and a limited number of junior positions that are available," says Jenny Koo, who lost her job offer with a tech company after completing her master's in computer engineering in December. "Distinguishing myself is really important. I've been utilizing my network a little more than I did last recruiting cycle, and I've been studying for coding tests again."
The good news for aspiring engineers like Koo is that, outside Silicon Valley, the economy is going strong — and plenty of industries unaffected by the tech downturn still want coders. Many non-tech employers, in fact, are seizing the chance to recruit the kind of talent that is usually snapped up by Big Tech. On the jobs board Handshake, government agencies are looking for 36% more entry-level software workers than a year earlier, and the construction sector is looking for 28% more. In a survey conducted by Handshake last summer, just over a third of the class of 2023 said that, given the economy's uncertain outlook, they were open to working in industries they hadn't previously considered.
"I'm finding that students are pivoting to organizations that have IT functions but are not in the tech industry," says Laura Garcia, director of career education at Georgia Tech. "It doesn't mean you can't work for Amazon one day. It may mean, how can I do a side step and gain a similar skill set that would be valued by Amazon, just in a different sector?"
But that shift in thinking may prove to be bad news for Silicon Valley in the long run. Given the seismic downturn in tech, some students are rethinking their dreams of working for the Amazons and Googles and Metas of the world. Previously, the tech giants were seen as sure bets, largely because they were. Layoffs were rare: Once you were in, you were in. Sure, you had to work hard, but in return the company took great care of you. That was in part why, in the aftermath of the financial crisis, the Valley overtook Wall Street as the destination of choice for the smartest kids at the best schools.
But now, in the current round of layoffs, students have watched as tech companies have kicked thousands of employees to the curb — sometimes via middle-of-the night emails that left them with no chance to say goodbye to their coworkers. After that, it's hard not to see Big Tech in a different light. Suddenly, in the eyes of Gen Z, tech seems to be just as ruthless and unreliable of an employer as banking did to millennials who came of age in the Great Recession.
"A student may have initially wanted to go to a FAANG company, but after witnessing some of the layoffs or job cuts, that doesn't feel so stable anymore," says Christine Cruzvergara, the chief education strategy officer at Handshake. "We know from our data that this particular class is really looking for stability."
In Handshake's survey last summer, 74% of the class of 2023 said job stability would make them more likely to apply for a job — almost double the share of students who said they wanted to work for a well-known company (41%) or a business in a fast-growing field (39%). In times of turmoil, it turns out that young go-getters care about the same boring thing as older generations: a steady income.
Dang, the student from Vietnam, is among those shaken by tech's sudden precarity. A year ago, given the choice between a job in the industry and a job outside it, she would have taken the industry role in a heartbeat. Now, she says, tech doesn't seem as glamorous to her as it once did.
"It looks so nice when everything's good," she says. "You have free food, free everything. A high salary. But with the layoffs, I now know that no matter how hard we work, they can still cut us overnight, you know? That's something that I'm worried about in tech."
Aki Ito is a senior correspondent at Insider.