Despite Layoffs, Tech Hiring Outlook Brightens for 2025: What You Need to Know

After a dramatic spike in layoffs in 2022 and 2023, tech companies are still trimming staff. Recently, Meta cut 5% of its workforce, letting go of over 3,000 employees, and Workday laid off about 1,750 employees or 8.5% of its staff. However, economists assert that these layoffs are not indicative of impending trouble; in fact, the pace of hiring began to stabilize in the latter half of 2024.

Why Are Big Tech Companies Laying People Off?

The hiring spree during the early years of the COVID-19 pandemic has reversed course due to rising inflation and interest rates. Companies like Meta and Amazon laid off thousands of workers in previous years. This trend of layoffs is expected to continue, but at a slower pace. According to Roger Lee, the creator of Layoffs.fyi, January and February are natural times for workforce reductions as they follow annual budgeting.

Former Tech Workers Face a More Difficult Hiring Environment

Laid-off tech employees are finding it tougher to secure new jobs compared to previous years. The hiring rate dipped to 3.4% as of December, with tech subindustries experiencing job losses. Amid these challenges, companies are focused on optimizing operations to remain lean and efficient.

Employers Optimistic for 2025

Despite the challenges, there is optimism for hiring in 2025. Nearly two-thirds of employers believe easing inflation and stabilizing interest rates will support headcount growth. ZipRecruiter has noted a shift in sentiment, with the tech sector showing signs of improvement.

Although job seekers with a college degree are facing a harsher reality, certain metrics indicate a positive outlook compared to pre-pandemic levels. For instance, the long-term unemployment rate shows similarities to levels seen in 2018 and 2019. Experts urge caution in comparing current conditions to the unique circumstances of the post-COVID era.