[White Collar Hardship] ② Ranked First for Dismissal but... "It's Bearable"

4 out of 10 Tech Workers Reemployed Within a Month of Layoff
Layoffs on One Side, Hiring and Investment on the Other
Low-Skilled White-Collar Workers Returning to Blue-Collar Jobs

[Asia Economy Reporter Haeyoung Kwon] Among US big tech companies, high-income white-collar office jobs have emerged as the top target for restructuring. However, behind the noisy layoff news, there is a heated hiring frenzy, resulting in a kind of job switching. Compared to blue-collar workers, whose value has risen sharply due to severe labor shortages, white-collar workers are in a more unfortunate position, but the shock they will receive is not expected to be that great.

4 out of 10 Tech Workers Reemployed Within a Month of Layoff

According to major foreign media on the 22nd, employees who recently left tech companies are quickly finding new jobs. An online job search site, ZipRecruiter, surveyed tech company employees who were laid off at the end of last year when the big tech layoff domino effect began in earnest. The results showed that 79% of respondents found new jobs within as little as one month to as long as three months after starting their job search. This is close to the 83% reemployment rate for laid-off workers across all industries during the same period. Among respondents, 37% succeeded in reemployment within one month of starting their job search, and 42% said it took between one and three months. Those who took more than six months to find a new job accounted for only 5%, significantly lower than the 26% reported in a survey conducted in February last year.

Despite the flood of layoff news from big tech, the actual sense of impact felt in the job market is not significant. Julia Pollak, chief economist at ZipRecruiter, analyzed, "Despite widespread layoffs, hiring freezes, and cost-cutting in the tech sector, many workers are finding new jobs at a very fast pace," adding, "Tech workers with in-demand skills remain the most sought-after personnel." In fact, despite large-scale layoffs, unemployment claims in the US labor market have not increased. The number of new unemployment claims announced on the 16th (local time) was 194,000, down by 1,000 from the previous week. Nancy Vanden Houten, chief economist at the UK think tank Oxford Economics, analyzed, "The tech sector layoffs show that workers find it really easy or are confident that it is easy to find other jobs."

Layoffs on One Side, Hiring and Investment on the Other

Although layoffs are occurring due to fears of economic slowdown, there is also analysis that the entire industry is not shrinking in size. According to ZipRecruiter, 74% of workers who were laid off from tech companies and then reemployed are still working in the same industry. Some companies have expanded hiring while conducting layoffs. For example, IBM announced plans to cut 3,900 jobs but said it would increase hiring in high-growth business areas such as cloud computing. Microsoft (MS), which announced plans to cut 11,000 jobs earlier this year, also revealed last month that it plans to invest $10 billion (approximately 12.95 trillion KRW) in OpenAI, the developer of ChatGPT. Additionally, although not traditional tech companies, consulting, financial services, and aerospace industries are also expanding hiring of tech experts.

The law firm industry is similar. US law firms such as Sherman & Sterling, Goodwin Procter, and Stroock conducted layoffs mainly targeting specialized lawyers handling corporate-related work as mergers and acquisitions (M&A) and initial public offering (IPO) markets shrank due to the Federal Reserve's aggressive tightening last year. On the other hand, litigation and government-related work are still booming, and hiring in these areas is expanding.

This atmosphere supports the view that large-scale layoffs like those during the global financial crisis of 2008-2009 will not occur. Phil Flora, vice president of Leopard Solutions, a law firm hiring analysis company, said, "Even law firms that recently announced layoffs are aggressively hiring employees in certain fields," and predicted, "The overall number of law firm personnel will continue to increase."

Low-skilled White-collar Workers Returning to Blue-collar Jobs

There is also a forecast that low-skilled office workers who temporarily belonged to the white-collar category will flock to blue-collar industries, whose value has risen due to the layoff wave. These workers originally worked in blue-collar sectors such as retail, restaurants, and services but were classified as office workers hired to support engineers and financial experts during the unexpected boom in 2020-2021, right after the outbreak of COVID-19. They faced the risk of layoffs first ahead of the recession. However, as they move to blue-collar jobs with higher value, they are expected to help alleviate the blue-collar labor shortage. The US economic magazine Fortune pointed out that these workers are turning their attention back to their previous jobs like a 'boomerang.'

Dave Gilbertson, vice president of UKG, a US human resources management solutions provider, said, "People who worked in retail, restaurants, and nursing moved to office jobs seeking higher wages, flexible work, and remote work," adding, "Recently, as not-so-good jobs in the tech and financial sectors suddenly disappeared, workers who had moved to office jobs are expected to return to blue-collar jobs." In particular, construction, retail, restaurants, lodging, healthcare, leisure, and service sectors are experiencing severe labor shortages, making it relatively easy to find new jobs, according to analysis.