The IT industry has run into difficulties. Every week seems to bring new reports of layoffs and hiring freezes at some of today's largest corporations. A similar trend is occurring at smaller businesses, although they may not have the name recognition to appear in your news stream. In any case, it's a challenging period, with many bright individuals suddenly unemployed.  

To be clear, no firm wants massive layoffs. Layoffs, according to Stanford Graduate School of Business Professor Jeffrey Pfeffer, have a significant influence on the behavioral and physical health of people affected, as well as increasing mortality and morbidity rates. And a whole generation is going through this experience for the first time. 

For software engineers and others who remain employed at a company that has endured layoffs, worry and tension can run high as teams walk cautiously and avoid making mistakes, fearing that subsequent failures would cost them their jobs.

In our recent report, "Release assurance: Why innovative software delivery starts with trust and psychological safety," we discovered that organizations that place too much emphasis on avoiding errors can have an unintended impact on everything from retention to the ability to make meaningful progress that can differentiate a product from its competitors.

For software organizations, the tendency of mass layoffs has sparked some heated disputes about how many people are truly required to keep a website or app functioning. 

The Layoffs Landscape

The computer industry, previously famed for its apparently unending expansion and rich chances, faces an unexpected reality: a wave of layoffs unprecedented in recent years. Over 240,000 IT jobs have been lost, casting a pall over the once-thriving industry and increasing questions about the future of the workforce.

In example, over 1,069 technology businesses have declared layoffs, affecting a whopping 244,342 people . This is more than 50% more than the total number of IT layoffs reported in 2022.

Google, Amazon, Microsoft, Yahoo, Meta, and Zoom have all announced massive workforce cutbacks, sending shockwaves across the sector. 

Conclusion

Overall, the impact of the tech layoffs on software developer wages is difficult to forecast and will depend on individual circumstances. While some downward pressure is expected, the underlying need for qualified labor, long-term growth expectations, and location-specific factors will all have a substantial impact on actual compensation results.