Navigating the tech turmoil: a deep dive into developer impact amidst layoffs
The dynamic process of creative destruction within the technology industry catalyzes significant innovation, with agile startups strategically outmaneuvering established counterparts and subsequently becoming attractive targets for billion-dollar acquisitions. However, this dynamism, characterized by its flexibility, is not without its challenges. During periods of prosperity with abundant resources, developers command considerable value, enjoying elevated salaries and enticing benefits.
Conversely, in challenging economic climates, these once-essential elite teams may be perceived as luxuries. Suddenly, even a prestigious and sizable team may face scrutiny as organizations, prioritizing profitability, find it imperative to ‘right-size’ their operational structure. Following the surge in hiring post-COVID, there is discernible evidence that software vendors are presently adjusting their financial strategies in response to global financial uncertainties. Meta’s recent ‘year of efficiency’ has reportedly resulted in a reduction of 20,000 jobs, although significantly fewer than the reported 225,000 losses in 2023 at the time of authorship.
In this blog post, we examine how developers were affected by layoffs in the tech industry in the last 18 months, presenting findings from SlashData’s Q3 2023 Developer Nation survey.
A very substantial proportion (45%) of developers were directly or indirectly affected by these layoffs. In particular, nearly a quarter of those — and 11% of all professional developers — were themselves laid off. We’ll look more closely at just who was affected further down the post.
It seems that employers were more willing to reduce headcount than to reduce benefits — 30% of developers were either laid off or know someone who was, whilst 22% either lost salary/benefits or didn’t get a raise. This shows the depth of the cuts needed for organisations to remain profitable — redundancies save on bonuses, benefits, and overheads, in addition to salaries.
Interestingly, as a result of this situation, we find that 12% of developers are considering changing career paths. According to our survey data, Industrial IoT (21%) and VR (18%) are the hardest-hit sectors. Given that many VR developers get into the profession due to their passion and evangelism for the technology, this must be particularly distressing for them.
Surprisingly enough, even despite the recent AI/ML gold rush associated with recent developments in large language models (LLMs), 16% of developers involved in ML/AI projects are considering switching.
* % of professional developers working in organisations of 2 or more employees
Sample Size: Q3 2023 (n=4,878)
Looking at the effect of company size, we can see that developers at the largest organisations — those with a thousand or more employees — were the least affected by layoffs. More specifically, 62% of them weren’t affected in any way. This demonstrates that, despite the widely-publicised layoffs from companies like Microsoft, Meta, and Google, the financial difficulties have been felt more keenly at smaller organisations. Understandably, though, 5-digit layoffs at a single company make for attention-grabbing headlines and collecting data on the wider number of smaller organisations is difficult. So here, we present this often under-reported view of how layoffs have affected developers at smaller organisations.
* % of developers working for organisations of each size
Sample Size: Q3 2023 (n=4,876)
Much of the reporting of these layoffs has focused on large organisations’ attempts to gain efficiencies by flattening their hierarchies. We can see this reflected in our data — the negative impact of the layoffs rises with developers’ level of influence on tool purchasing decisions.
Developers in senior roles have been hit the hardest by the negative impacts of the layoffs, proportionately, at least. Under half of the decision-makers remain unaffected as of Q3 2023 — compared to 64% of those not involved in tool selection decisions. Furthermore, more than a third (37%) of decision-makers were either laid off themselves or knew someone else who was. Just 24% of non-decision-makers say the same.
Decision-makers — with their commensurately higher salaries — were also nearly twice as likely as those not involved in tool selection decisions to feel the financial squeeze from the situation, with 27% experiencing reduced salaries, bonuses, and/or benefits, vs. 14% of those not involved in tool purchasing decisions.
* % of professional developers working in organisations of 2 or more employees that have each level of influence on tool purchasing decisions
Sample Size: Q3 2023 (n=3,998)
Developers’ influence and the size of the organisation they work at are not the only factors at play in whether or not they have been affected by layoffs. We also must consider developers’ skill levels. Here, we present two views that capture different aspects of developers’ level of expertise:
- Years of experience in software development
- Where developers learnt to code
The most experienced developers suffered the fewest ill-effects from the layoffs. No matter how you measure it, they are the least likely to have been laid off, know someone who was laid off, or to have experienced reduced salaries, bonuses and/or benefits. Subsequently, just 6% say that they are considering changing career paths. Clearly, these developers have a greater sunk cost to consider than the least experienced — those with two or fewer years under their belts — but this data demonstrates just how essential highly experienced developers are to the smooth running of an organisation.
In fact, being highly experienced appears to mitigate some of the negative effects experienced by decision-makers. For example, 68% of decision-makers with 11+ years of experience saw no negative effects from the layoffs, compared to 39% of those with 3–10 years under their belts. Although decision-makers are the most likely to have experienced negative impacts from layoffs, organisations still recognise the value of having experienced developers in key positions.
* % of professional developers in organisations of 2 or more employees who have each level of experience in software development
Sample Size: Q3 2023 (n=4,878)
Looking at expertise from another angle — developers’ level of education, we can see that bootcamp-educated developers are at a significant disadvantage, even over those who don’t know how to code. Just 38% of bootcamp-educated developers suffered no ill effects from recent layoffs, and 43% were either laid off or know someone who was. This data indicates that:
- Some bootcamps don’t equip developers with sufficient skills to weather storms — these developers are often the first to go, and;
- Bootcamp-educated developers have a large network of similarly skilled friends and colleagues who also suffered from these layoffs.
As for those who don’t know how to code — whose outcomes appear better than even developers educated at a postgraduate level — we see that some roles are over-represented:
- 13% are product managers / marketers / salespeople,
- 12% are tech/engineering team leads,
- 12% are system administrators (using visual development tools to manage infrastructure),
- 11% are business analysts.
All of these roles, though vital to the software development process, don’t necessarily involve writing code, and it appears that these roles are robust to change. Tech/engineering team leads were one of the least affected roles, with 60% of them indicating that they weren’t affected by the recent layoffs. So, whilst middle managers and decision-makers were the most likely to face the axe, many organisations continued to recognise the value of individual contributors and those who manage them directly, regardless of their coding skills. Indeed, AI-assisted programming and visual development tools have reduced the reliance on traditional coding skills, and this area continues to experience rapid change and development.
* % of professional developers at organisations of 2 or more employees
Sample Size: Q3 2023 (n=4,802)
In the ever-changing tech landscape, uncertainty is a constant companion. Layoffs have left an indelible mark, prompting developers to reassess and adapt. As we brace for the next cycle, the key lies in continuous skill-building and staying connected. SlashData’s Developer Nation community stands as a beacon, offering insights and expert access. Stay tuned to our socials for the latest — together, let’s embrace the challenges and ride the waves of opportunity in the dynamic world of tech. Check out the 25th State of Developer Nation report for more insights.
