Tech Layoffs & What They Mean For The Future Of Tech In 2024 & Beyond

A wild acronym appears: MEBA-FLAP.

It's in everyone's feed, news, and minds. Perhaps you're a part of the rolling tech layoffs, or you at the very least know someone affected. The worst part is that once these layoffs started occurring, people reported that the tech job market was crowded, and stiff in competition, while recruiters ghosted them left and right.

The very company I worked for was affected last year, in a debacle followed by eventual bankruptcy and creditor-in-possession. It continued in some zombified version of itself before its brand was acquired in the scrapings of the courtroom floor. Some people jumped ship to a spinoff technology startup.

The world is blaming the layoffs on a number of factors across the internet; including some completely wild conspiracy theories, the most uniform and disguised of which being AI. So many headlines are reading into AI being the cause of the layoffs. Here are some examples:

• Recent data shows AI job losses are rising, but the numbers don’t tell the full story
• 1 in 3 Companies Will Replace Employees With AI in 2024
• Unhappy new year: 2024 opens with wave of layoffs in tech, and AI could be making it worse

I'm contending that isn't it at all. In my opinion, if AI was as adopted into normal work streams and daily life as everyone reports, we would be seeing layoffs across every industry and job description. Instead, we are seeing fundamental shifts in company priorities, as told by the laying off of large swaths of certain departments. (e.g. Recent Google layoffs targeting voice assistant teams)

Quite often history repeats itself, and that fact may or may not bring you solace. As far as tech goes, it definitely should. It's easy to get bogged down in the negative news, and the accounts of many of our fellow programmers that have reported negative stories. It's important to see the positive stories, and also think critically about what's actually going on. I think the future bodes well for developers, and there are a variety of factors I believe are affecting the tech industry that prove most news sources have amnesia.

After speaking with a few friends who have opinions on the layoffs or have been through the literal dot-com bubble, I'm able to compile a list of factors I am confident are actually contributing to this time period which I'm going to coin as the MEBA-FLAP era (Many Entities Blabbering AI-Fueled Layoffs And Prevarication). Otherwise known as poking fun at the numerous sources of news declaring that AI is eating the world.

These factors I speak of are the following:

• Interest Rates
• Mismanagement
• Cyclical Markets
• Saturation

Let's break down the factors above and support them with some evidence.

Interest Rates

Interest rates have a bearing on the entire stock market, and therefore all of business conducted throughout the US, rippling to the entire world. Lately, they have been used to combat an insane rate of inflation but can be set from the influence of the durable goods report and other economic factors. This is where I digress, as I'm not an economic expert.

That said, I think it's very easy to see that the cost of borrowing money has gone up in recent years. In fact, the rise of which correlates with tech layoffs. Why? If it's not obvious how this correlates, take a look at the split of where money goes, in terms of industry from VC. Over the year 2022, of $240.8 billion in VC funding, $90.2 billion went to software companies (37% of the total, across 11 industries). Capital drives businesses, therefore, capital drives tech. Borrowing became expensive, therefore, businesses pumped the breaks on spending.