Articles
Tech Sector Layoffs Have Begun. What Happens Now?
IndicaNews
by Ritu Jha
November 23, 2022 - American economic cycles have seen tech sector layoffs in 2002 and 2008, but what seems to be different in 2022 is the support system for those on H1-B visas.
So, when last week, after Twitter followed by Meta, Amazon, Cisco, and Google terminated thousands, instead of going into shock mode, the Silicon Valley community rose as one to help immigrants.
“No one was prepared for this,” said Dharmesh Jani (DJ), Technology Ecosystem Builder, Meta Platforms and one of the board members of IIT Bay Area. Last week, he hosted IIT-Bay Area Career Club AMA (Ask Me Anything) on ‘Surviving Layoffs while on H1B’.
Jani told indica that WhatsApp groups are pinging non-stop. Thousands were laid off in November, and “our motivation is to help them.”
So, when last week, after Twitter followed by Meta, Amazon, Cisco, and Google terminated thousands, instead of going into shock mode, the Silicon Valley community rose as one to help immigrants.
“No one was prepared for this,” said Dharmesh Jani (DJ), Technology Ecosystem Builder, Meta Platforms and one of the board members of IIT Bay Area. Last week, he hosted IIT-Bay Area Career Club AMA (Ask Me Anything) on ‘Surviving Layoffs while on H1B’.
Jani told indica that WhatsApp groups are pinging non-stop. Thousands were laid off in November, and “our motivation is to help them.”
Twitter headquarters in Silicon Valley, CA
“People were trying to help each other. It often looked like the blind are leading the blind. So, I offered to help,” Jani said. “As an electrical engineer, I am aware of the signal to noise ratio. In these groups, people often say important and interesting things, but because of the massive amount of chatter, those important things get lost.
Jani said there are not enough jobs to go by on LinkedIn or elsewhere. “We are really in a downturn, in a severe macroeconomic situation. Companies have just started layoffs. They are not done yet.”
For instance, Jani pointed out, Amazon said it will continue its layoffs in 2023. Google said the same. “My objective was simple – to give a common forum for immigration and labor experts and attorneys to connect with those affected. I am not seeking any outcome, I am just providing the platform.”
Jani said there are not enough jobs to go by on LinkedIn or elsewhere. “We are really in a downturn, in a severe macroeconomic situation. Companies have just started layoffs. They are not done yet.”
For instance, Jani pointed out, Amazon said it will continue its layoffs in 2023. Google said the same. “My objective was simple – to give a common forum for immigration and labor experts and attorneys to connect with those affected. I am not seeking any outcome, I am just providing the platform.”
One of the common questions that everyone is asking is, “When does my 60-days clock start for finding a new employer if I am on H1-B. If I got a termination email or was laid off on November 1, when do the 60 days begin? Is it after I get my severance or on the day I got an email?”
There are many more questions, of course. Jani feels that this time round, the situation will not be as bad as 2002 after the dotcom bubble burst. “People know they have options in front of them and can extend their stay in America. Many might go back and get an L1 visa to get a Green Card faster.
Jani says inflation went out of control, and the government pulled out on spending. “This is a delayed reaction,” he said. “So that is the reason everything was delayed. When Silicon Valley gets hit, there will be a ripple effect. What concerns me the most is the stress and anxiety among those who lost their jobs. “Therefore, I am planning to host more such forums.”
He added that no downturn is forever, and that people should use this opportunity to enhance their skills and when things open up, use them to get new jobs.
Venture capitalist Priya Ramachandran, who is an early-stage investor and advisor on cross-border ventures, said 17 people have lost jobs in her inner circle alone, and only two of them have got new job offers.
Ramachandran, who deals with SaaS groups, says the layoffs are massive, but we read the names of only publicly listed and reported companies. She feels that it is not just inflation or high-interest rates that are causing the layoffs. “In 2021, salaries went up by 100-150%. People moved easily between companies and begam earning $100-$200K more, and that was insane.”
She said a salary correction is surely due now, and “that is one of the reasons why people are making adjustments.”
There are many more questions, of course. Jani feels that this time round, the situation will not be as bad as 2002 after the dotcom bubble burst. “People know they have options in front of them and can extend their stay in America. Many might go back and get an L1 visa to get a Green Card faster.
Jani says inflation went out of control, and the government pulled out on spending. “This is a delayed reaction,” he said. “So that is the reason everything was delayed. When Silicon Valley gets hit, there will be a ripple effect. What concerns me the most is the stress and anxiety among those who lost their jobs. “Therefore, I am planning to host more such forums.”
He added that no downturn is forever, and that people should use this opportunity to enhance their skills and when things open up, use them to get new jobs.
Venture capitalist Priya Ramachandran, who is an early-stage investor and advisor on cross-border ventures, said 17 people have lost jobs in her inner circle alone, and only two of them have got new job offers.
Ramachandran, who deals with SaaS groups, says the layoffs are massive, but we read the names of only publicly listed and reported companies. She feels that it is not just inflation or high-interest rates that are causing the layoffs. “In 2021, salaries went up by 100-150%. People moved easily between companies and begam earning $100-$200K more, and that was insane.”
She said a salary correction is surely due now, and “that is one of the reasons why people are making adjustments.”
Christian D. Malesic, President/CEO, Silicon Valley Central Chamber told indica over email that, “The Silicon Valley Central Chamber is tracking the layoffs in the region which are growing in scale and intensity. The workforce downturn is resulting from a combination of the current recession, rising interest rates, and lack of consumer confidence. However, we would be remiss if we failed to mention that layoffs are highly reactionary to the Work from Home (WFH) workers refusing to return to the office.”
“Management has accommodated the WFH crowd for far longer than they would have preferred. Now, they are acting,” Malesic stated.
AGK Karunakaran, president and CEO at MulticoreWare, says certain segments of the business got affected and this will have a cascade effect. “The base revenue is pretty much going away and that is what is causing a problem,” he said. “It is difficult to predict and it’s a confluence of multiple things.”
Experts say that Facebook and Google are facing an ad revenue crunch, and the revenue is not matching their expenses. In 2002, many engineers who had been in the US had no option but to go back to India. Most of the large US corporations have built big India offices as well in the last 20 years, and this makes Indian engineers secure in their homeland. If they are sacked, there are other alternatives. But if you are on H1-B in the US, alternatives are hard to find and that too with high rents and without family support.
Karunakaran feels that even start-ups will find it difficult to raise money. “But if the idea is good, VCs will invest. They have raised money and they have to invest. But the entrepreneurs may have to give more ownership to the investor. And because the revenue situation will tighten, the expenses have to be tight, too,” Karunakaran said.
When indica asked Karunakaran whether he is concerned about a huge meltdown, he said, “We are very vigilant. We keep talking to our customers, and even our customers are inquisitive about our course of action. They have their own plans and expenses and we also want that our expenses are carefully monitored.”
Experts say that Facebook and Google are facing an ad revenue crunch, and the revenue is not matching their expenses. In 2002, many engineers who had been in the US had no option but to go back to India. Most of the large US corporations have built big India offices as well in the last 20 years, and this makes Indian engineers secure in their homeland. If they are sacked, there are other alternatives. But if you are on H1-B in the US, alternatives are hard to find and that too with high rents and without family support.
Karunakaran feels that even start-ups will find it difficult to raise money. “But if the idea is good, VCs will invest. They have raised money and they have to invest. But the entrepreneurs may have to give more ownership to the investor. And because the revenue situation will tighten, the expenses have to be tight, too,” Karunakaran said.
When indica asked Karunakaran whether he is concerned about a huge meltdown, he said, “We are very vigilant. We keep talking to our customers, and even our customers are inquisitive about our course of action. They have their own plans and expenses and we also want that our expenses are carefully monitored.”