The tech industry witnessed a substantial surge of layoffs in 2025, impacting 89,964 individuals as of the latest Layoffs.fyi report. Widespread layoffs have left career changers in the tech industry anxious about their dwindling opportunities to transition into new roles. But should these numbers be a cause for alarm?
This article delves into the reasons behind the layoffs and their implications. Through careful analysis of prevailing trends and valuable insights, we will attempt to shed light on the job outlook for tech professionals amidst the tech layoffs.
Reasons Behind Tech Layoffs: Unveiling the Causes
Since the initial surge of tech employee layoffs began in 2022, the numbers have been alarming. According to Layoffs.fyi, a startup that tracks tech layoffs since COVID-19, the scale of these layoffs has been substantial.
In 2022, 1,064 companies laid off a total of 165,269 tech professionals. However, the largest wave of layoffs occurred in January 2023, with 273 companies letting go of a staggering 89,554 employees. According to Layoffs.fyi’s data for 2023 alone, 1,193 tech companies have already laid off a total of 264,220 workers, nearly doubling the numbers from 2022. In 2024, companies that laid off were 551, resulting in 152,922 tech employees. The most recent statistics in 2025 show that from the beginning of the year up to September, 89,964 tech employees were laid off from 204 tech companies
But why are these companies laying off employees?
Forbes and Q.ai (via another Forbes article) listed the following reasons for the tech layoffs:
- Cost Reduction and Economic Considerations: Big tech companies engage in layoffs to reduce costs and optimize expenses during a global economic slowdown, potential recession, or challenges in stock values.
- Strategic Shifts and Business Priorities: Tech companies prioritize business strategies such as investments in AI companies and automation, leading to layoffs in certain job roles as the focus shifts towards AI technologies and resource allocation.
- Hiring Policy Adjustment: Layoffs occur as companies wind back hiring policies implemented during the pandemic, following a hiring spree that resulted in bloated payrolls.
- Financial Targets and Efficiency: Companies aim to meet financial targets by cutting longer-serving employees with higher salaries and optimizing workforce expenses.
- Automation, Resource Allocation, and HR Functions: Automation replaces certain HR functions, reducing the need for HR staff, while companies cut back on recruitment to allocate resources effectively. This impacts HR departments, accounting for a portion of the layoffs.
- Copying Behavior and Investor Expectations: Some tech companies lay off employees due to a tendency to imitate other companies’ actions. The emphasis on revenue per employee and investor expectations also influences downsizing choices.
Identifying the Vulnerable: Who Is Being Laid Off?
During tech industry layoffs, specific roles and individuals are more likely to face job cuts. Before getting overly concerned about the layoffs, it’s important to understand who will be affected. Fast Company reported insights from Layoffs.fyi and ZipRecruiter, providing an overview of those who are vulnerable.
- Sales, Recruiting, and HR Roles: Around 20% of laid-off tech workers are in sales positions, while recruiting and HR roles are disproportionately impacted given their size. Many companies have laid off 50% or more of their recruiters and HR professionals.
- Marketing and Sales Professionals: During recessions or economic challenges, marketing and sales professionals in tech companies are typically more affected than revenue-generating departments.
- Tenure and Seniority Levels: Newly hired and long-term employees are at higher risk of layoffs. Based on the “last-in, first-out” principle, recent hires may have less defined roles, lower productivity, or weaker loyalty compared to their more experienced colleagues. Long-tenured, high-paid employees may also be targeted to reduce costs.
The Major Conundrum: Job Losses and Talent Shortage
Layoffs in the tech industry have broader implications beyond individual companies. Low employee engagement and poor customer service often result from low workforce morale and job security. Layoffs can disrupt the job market, leading to more competition for jobs and changes in industry dynamics.
Tech layoffs present both immediate challenges and future opportunities for those affected. Despite job losses and financial uncertainty, there is still a high demand for tech skills. Laid-off workers can explore new career paths in industries like healthcare, finance, retail, or manufacturing. Adaptability and resilience are essential for navigating the evolving job market and embracing new opportunities.
While we were preoccupied with the layoffs, we overlooked the larger picture: there is a global shortage of talent, including tech talent.
People Are Losing Jobs; Employers Cannot Find Talents
Despite reports of surging tech layoffs, many companies are still having difficulty finding tech talent. According to Forbes (2025), many companies have hired individuals laid off by tech giants.
Indeed, while some displaced workers still face challenges, others quickly find new roles. Layoffs trackers show that tens of thousands of tech employees were cut in 2025, for example, Layoffs.fyi (reported by NerdWallet) recorded 81,972 employees laid off across ~189 tech companies in 2025
According to industry analysis, there has been a multi-year shortage of skilled tech workers, which the pandemic-era hiring boom worsened; recent layoffs have not erased that structural gap. Many companies that cut staff in 2024–2025 did so after aggressive pandemic hiring and in response to macroeconomic uncertainty, but demand for specialized tech skills remains
The layoffs can be seen as a reaction to overhiring during the pandemic boom and companies preparing for possible recessionary pressures. However, the tech labor pool is still resilient. CompTIA’s Tech Jobs analysis (June/July 2025) found that the tech unemployment rate fell to ~2.8% in June 2025, and CompTIA estimated that employers added an estimated net +90,000 tech professionals that month, evidence that hiring continues even amid headline layoffs.
Despite ongoing layoffs, the paradox remains: employers say they cannot find the talent they need, and non-tech companies are actively recruiting technical specialists, meaning job listings for tech roles are no longer limited to technology companies. Indeed, labor-market trackers show that tech job postings remain below pre-pandemic levels in many metro areas (e.g., Austin postings down ~28%), while non-tech job postings in some of those same metros are up ~11%, suggesting demand is shifting across industries.
Opportunities Beyond Layoffs
The increase in layoffs doesn’t imply a lack of job opportunities for tech professionals. In fact, according to the Bureau of Labor Statistics, the job outlook for computer and information technology occupations is projected to increase by 15% over the next decade. This applies to most tech professionals, particularly information security analysts and software developers. However, programmers have a negative job outlook, as shown in the table below.
Although the tech industry may no longer possess the same exclusive allure it once had, tech workers can transition to different industries and experience comparable benefits, salaries, and flexibility. Tech talent now has opportunities beyond Silicon Valley. Finding a successful and stable career in tech now is a matter of knowing where to look.
Exploring the Non-Tech Industry
The demand for technical professionals extends beyond the technology sector. Non-tech industries are realizing the significance of technology and actively seeking individuals with tech skills to lead digital transformation and innovation. This trend creates new career opportunities for tech professionals in various sectors.
Recent industry research shows that tech roles are increasingly being distributed across non-tech sectors. According to CompTIA’s State of the Tech Workforce 2025, tech employment is projected to grow about twice as fast as overall U.S. employment over 2024–2034, while the annual replacement rate in tech occupations is estimated at 6% (~352,000 workers). In parallel, a report on tech hiring by Robert Half highlights that companies across all industries (not just technology firms) are prioritizing roles in AI, cloud, data, DevOps, and cybersecurity — signaling that many non-tech companies are now competing for technical talent.
In fact, outside of the computing industry, the following, according to the U.S. Bureau of Labor Statistics (BLS), are the top employers of various tech professionals:
- Management of Companies and Enterprises
- Management, Scientific, and Technical Consulting Services
- Scientific Research and Development Services
- Credit Intermediation and Related Activities
- Advertising, Public Relations, and Related Services
- Federal Executive Branch
- Colleges, Universities, and Professional Schools
The BLS further projects that software developers, quality assurance analysts, and testers will see employment grow by about 16% from 2024 to 2034, adding roughly 288,000 new jobs, while computer systems analysts are expected to grow by about 9% in the same period. According to Robert Half’s 2025 In-Demand Technology Roles & Hiring Trends, unemployment rates for tech roles in the U.S. remain very low (for example, 2.8% for software developers in Q1 2025), reinforcing the strength of demand. At the same time, Indeed Hiring Lab data suggests that tech job postings are still below pre-pandemic levels in many metro areas (e.g., Austin down ~28%), whereas non-tech job postings are up ~11%, indicating greater resilience in non-tech sectors. Moreover, in the first four months of 2025, over 50,000 tech employees were laid off in the U.S., providing a skilled candidate pool for non-tech firms to recruit.
Other industries that tech professionals should explore are:
- Healthcare
- Retail
- Education
- Finance
- Media and Entertainment
The digital transformation is blurring the lines between tech and non-tech industries in terms of tech roles, offering tech professionals the chance to explore alternative paths.
Embracing New Horizons
While there has been a surge in tech layoffs, it’s important to view them as a temporary setback rather than a limitation on career prospects.
The demand for tech talent remains high, and the tech labor pool is growing. Tech professionals can explore diverse industries that value their skills, even though certain roles may be vulnerable. To succeed in the changing job market, it is crucial to adapt, seize opportunities, and upskill.
Tech professionals can navigate layoffs and find promising careers beyond the traditional tech sector by staying informed, leveraging transferable skills, and embracing digital transformation.
Yellow Tail Tech offers guidance and reassurance to individuals exploring new opportunities in the world of IT. Book a 10-minute intro call with our Enrollment Advisor now!
Frequently Asked Questions
- Which tech jobs are most affected by layoffs?
Recruiting, HR, sales, and some marketing roles have been hit hardest, along with newly hired or higher-paid long-tenured employees. - How do layoffs affect the overall job market?
Layoffs increase competition for roles but also open opportunities in non-tech industries such as healthcare, finance, retail, and education. - How can tech workers future-proof their careers?
Continuous learning, cloud certifications, cybersecurity training, and adaptability are key to staying competitive. - Why are tech companies investing in AI while laying off employees?
Companies are reallocating resources to automation and AI, which reduces the need for certain roles but creates new demand for advanced technical skills.
