Tech lay-offs shock young workers. The older people? Not so much

SAN FRANCISCO – When Lyft laid off 13 per cent of its workers in November, Ms Kelly Chang was shocked to find herself among the 700 people who lost their jobs at the San Francisco company.

“It seemed like tech companies had so much opportunity,” said Ms Chang, 26. “If you got a job, you made it. It was a sustainable path.”

Mr Brian Pulliam, on the other hand, brushed off the news that crypto exchange Coinbase was eliminating his job. Ever since the 48-year-old engineer was laid off from his first job at the video game company Atari in 2003, he said that he has asked himself once a year: “If I were laid off, what would I do?”

The contrast between Ms Chang’s and Mr Pulliam’s reactions to their professional letdowns speaks to a generational divide that is becoming clearer as the tech industry, which expanded rapidly through the pandemic, swings towards mass layoffs.

Microsoft said this week it planned to cut 10,000 jobs, or roughly 5 per cent of its workforce. And on Friday morning, Google’s parent company Alphabet said it planned to cut 12,000 jobs, or about 6 per cent of its total. Their cuts followed big layoffs at other tech companies such as Meta, Amazon and Salesforce.

Millennials and Generation Z, born between 1981 and 2012, started tech careers during a decade-long expansion when jobs multiplied as fast as iPhone sales. The companies they joined were conquering the world and defying economic rules.

And when they went to work at outfits that offered bus rides to the office and amenities including free food and laundry, they were not just taking on a new job; they were taking on a lifestyle. Few of them had experienced widespread layoffs.

Baby boomers and members of Generation X, born between 1946 and 1980, on the other hand, lived through the biggest contraction the industry has ever seen. The crash of the early 2000s eliminated more than one million jobs, emptying Silicon Valley’s Highway 101 of commuters as many companies folded overnight.

“It was a bloodbath, and it went on for years,” said Mr Jason DeMorrow, a software engineer who was laid off twice in 18 months and was out of work for more than six months. “As concerning as the current downturn is, and as much as I empathise with the people impacted, there’s no comparison.”

Tech’s generational divide is representative of a broader phenomenon. The year someone is born has a big influence on views about work and money. Early personal experiences strongly determine a person’s appetite for financial risk, according to a 2011 study by economists Professor Ulrike Malmendier of the University of California, Berkeley and Professor Stefan Nagel of the University of Chicago.

The study, which analysed the Federal Reserve’s Survey of Consumer Finances from 1960 to 2007, found that people who came of age in the 1970s, when the stock market stagnated, were reluctant to invest in the early 1980s when it roared. That trend reversed in the 1990s.

“Once you experience your first crash, things change,” Prof Nagel said. “You realise bad stuff happens and maybe you should be a bit more cautious.”

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