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Cecilia Ng and her husband were returning to San Francisco in March, after a vacation to celebrate her 40th birthday, when murmurs of layoffs began getting louder.
A recruiter at Sonder, an apartment rental startup, Ng already had a sense that the job market around America was getting more precarious by the day as the economic catastrophe brought on by the coronavirus was becoming clearer.
Before she left on what would be a two-week getaway in Colombia, spent eating seafood, exploring the convent-turned-hotel where she was staying and doing some beach reading about meditation and Buddhism, her managers at Sonder had offered employees reassurance.
But within 24 hours of returning home, Ng was out of a job, along with about 400 other furloughed and laid-off colleagues. She got two weeks severance, medical benefits until the end of the month and had a few hours to remove personal files from her work laptop before she was locked out.
“Because they communicated throughout the day, they asked us not to communicate with colleagues,” Ng said. The call during which her boss let her go lasted 10 minutes.
Ng wasn’t alone. More than 33 million people have applied for initial unemployment claims in the past seven weeks, an economic crisis spurred by efforts to contain the coronavirus, which has infected more than 3.7 million and taken the lives of over 264,000 people around the globe. In April, the US job market tallied its worst month on record, with an unemployment rate of 14.7%, up from 4.4% in March.
But as Ng soon found out, there’s been an uptick in job openings in Silicon Valley over the past few months. She was able to find a new position in just under 3 weeks as a technical recruiter at Robinhood, the company behind the same-named app for stock trading.
Despite the pandemic and looming recession, much of the tech industry continues to post job listings and hire employees. Many companies are even planning to continue offering summer internships, though with a work-from-home twist. Apple, Amazon and Microsoft each list at least 2,000 open jobs on their respective sites, and the companies all say they’re still hiring. Google has said it’ll reduce investment in new hires for the rest of the year, in part because of a slowdown in advertising revenue. Facebook, also hit by an ad crunch, said it plans to hire 10,000 people across its tech and product teams in 2020.
The San Francisco Bay Area, home to Apple, Facebook, Google, Netflix and Salesforce, notched 17% growth in new jobs posted in March from the same time a year ago, according to data compiled by employment site Monster. And the US Department of Labor said in the week ended May 2, California saw one of the biggest drops in new unemployment claims in the country.
There are outliers like Uber, Lyft and Airbnb, said Jonathan Beamer, Monster’s head of marketing. Tens of millions of people have been ordered to shelter in place to slow the spread of the coronavirus, forcing travel-related tech companies to lay off tens of thousands of employees. But tech firms, particularly the larger players, appear poised to grow their workforces rather than shrink them.
“The tech industry is just moving forward,” Beamer said.
The relatively rosy picture for big tech further illustrates our growing dependence on some of the biggest players as we weather this lockdown. It’s also in stark contrast to the situation faced by the rest of the world, where the coronavirus pandemic has forced the closure of businesses and the cancellation of events; kept people from travel; and even temporarily shut the doors to Disneyland. Scientists are racing to find a cure and develop a vaccine for the virus.
Apple was one of the first tech giants to warn that its business would be disrupted. In February, after it saw factory disruptions and sales drop in China, where the coronavirus is thought to have originated, the company said sales appeared likely to fall. By mid-March, local governments in the US began issuing stay-at-home orders, closing nonessential businesses.
The result: Millions of people furloughed or laid off are competing for fewer available jobs. Arts, entertainment, childcare and tourism job postings have dropped at least 50% so far this year, according to data compiled through May 1 by employment site Indeed. Construction, manufacturing and banking, meanwhile, have been less affected but still have seen dramatic dropoffs. Software development has seen some of the smallest declines, but postings are still down nearly 33%, Indeed said.
Though some jobs in tech land may be disappearing, companies such as Amazon and Instacart have announced hiring sprees that’ll see them adding 175,000 and 300,000 workers, respectively, to help manage warehouses and deliveries as people click to order from home. All that adds up to tech companies potentially growing their overall share of workers in the country, bolstering their already considerable influence in people’s lives.
“When you have Amazon and Instacart hiring hundreds of thousands of people while millions of people lose their jobs, tech will become a much bigger part of the economy,” said Bob O’Donnell, an analyst at Technalysis Research.
Startup slowdown
The broader tech industry may be doing well, but not everyone is thriving. Startups are being warned they may struggle to raise new capital, which could mean a cutoff of lifeblood to companies that haven’t yet perfected their product or built enough of a business to succeed on their own.
“Coronavirus is the black swan of 2020,” began a March letter from Sequoia Capital, sent to founders and CEOs it invested in. The influential venture firm, known for early investments in Apple, Google, LinkedIn and YouTube, offered recommendations to companies about how to navigate the crisis.
Sequoia urged companies to prepare for sales to fall apart and financing to dry up. Companies should also reconsider which staff to keep on and how much they’re spending on marketing.
“A distinctive feature of enduring companies is the way their leaders react to moments like these,” the letter said.
Since that warning, hiring appears to have slowed in the startup resources (https://startupgrowth.asia/) world. “They’re tightening up,” said Jill Hernstat, a recruiter at executive search firm Hernstat & Co.
For instance, Hernstat noted, hot startup TripActions, a maker of corporate travel software, laid off hundreds of employees in March and stopped hiring, removing all open job listings on its website. At the time, the company, valued at $4 billion before the crisis, told The Wall Street Journal that it has money in the bank. But with travel almost completely halted, TripActions said, it had decided to shrink its spending and workforce to bring them “inline with the current climate.” (TripActions didn’t respond to a request for comment.)
LinkedIn, the job-oriented social network, said it’s also noticed a drop in job postings at startups. It said that among unicorn companies (those valued at more than $1 billion), job postings in March were barely half what they were during recent highs last July.
“Coronavirus is the black swan of 2020.”
Sequoia Capital letter to founders and CEOs
Not all tech companies are affected the same way. Unicorns working on hardware, travel, health and education have seen job postings drop more than 40%, LinkedIn said.
But companies specializing in artificial intelligence, communications and cybersecurity have increased job listings by 10% or more. Robinhood, the stock trading app Ng works for, said it’s hired 100 employees since transitioning to remote work in March, and it plans to add hundreds more by year’s end.
Larger tech companies that aren’t travel-related will likely weather the storm better than most, said Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement and executive-coaching firm.
One benefit is that employees are able to work anywhere, since their jobs revolve around computers. These companies also tend to have younger employees, who are less likely to have preexisting medical conditions that could make the coronavirus deadlier for them. But Challenger still expects that the industry will struggle along with others.
“It doesn’t matter if you’re a Silicon Valley tech company or a manufacturer in the rust belt, uncertainty makes doing business really hard,” Challenger said.
Recruiting changes
Many top Silicon Valley companies, such as Apple, Facebook and Google, notoriously expect employees to come into the office, even if it means enduring grueling hours-long commutes. That attitude is beginning to change though, as employees push for more-flexible work hours while they’re taking care of kids home from school or family members kicked out of nursing homes.
The pandemic is also changing how companies run their annual internship and recruiting programs. Apple said its internship program will continue, both in-person and virtual, for more than 1,000 students this year. The iPhone maker plans to pay them the same that it has in years past, too.
“We believe it’s important to keep this pipeline of opportunity going, and we will extend to our interns the same precautions and care that we’re extending to all our other personnel as a part of the ongoing COVID-19 response,” an Apple spokesman said.
Facebook will shift its intern class online, keeping roughly the same number of students and paying them the same as in the past, though it declined to disclose those figures. Microsoft said its intern class will be bigger this year, topping 4,000 students, through a virtual program. Twitter will have a smaller group, and the program will be entirely over the internet as well. Pinterest similarly will offer internships, though not in its sales division, and apprenticeships have been postponed. Airbnb, meanwhile, canceled its intern program altogether this year, though it did offer a 2021 internship to people it had already selected.
It’s hard to tell how many tech internships have been affected by the COVID crisis, but Monster tallied about a 70% drop in internships across the US so far this year.
“Having interns typically takes a lot of work just to get them up to speed and find them a compelling project,” said Shannon Schiltz, head of HR and people practices and operating partner at venture firm Andreessen Horowitz, known for its investments in Facebook, Twitter, Oculus VR and the popular online game Roblox. Students don’t just lose out on an internship at a specific company and a chance at a potential job, she added. Not having an internship “potentially bleeds into interns securing jobs as a college grad in the following year.”
“We believe it’s important to keep this pipeline of opportunity going.”
An Apple spokesman
Dell restructured its internship program for more than 900 students in the US in March. It sent a note to all its interns, explaining that the program would be virtual, they’d still be paid and the duration would be 9 weeks instead of the typical 11 or 12.
Dell also discussed plans for teaching all the interns the company’s software development processes, and offering a schedule of social events and work projects that’ll help build their skills. After the program wraps up, Dell plans to hire some of the interns at the end of the summer, as it has in years past.
“They’re telling us they want skill building and development,” said Jennifer Newbill, Dell’s director of university recruitment. “We want to make sure they learn a skill.”
Ng, the recruiter at Robinhood, was used to getting LinkedIn requests from students looking for a job. But now, she said, experienced software engineers who may not have responded to her overtures a year ago are coming to her instead. She remembers wondering if she should wait out the economic disruption, and whether any new job would be better than the one she’d just lost.
Watching other people losing their jobs, she’s grateful she found one. “There’s going to be this downstream effect on the industry, which means more talented people are going to come onto the market,” she said.
But it seems they’ll be able to find a job. For now.
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