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The tech industry is losing power.
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One economist says job losses in the tech industry exceed those in the past two recessions.
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Still, other areas of the job market remain soft.
This is a tech carnage in the job market.
Friday’s jobs report was extremely weak, showing the economy lost 92,000 jobs in February, well below expectations for job growth of 55,000. After the news was released, economist Joseph Politano posted on X that the technology industry has had a particularly difficult time in recent years.
“For a while, you could at least say we weren’t gaining jobs like we used to, but we weren’t losing jobs either. Everything was at a standstill,” Politano told Business Insider. “Last year, that completely changed and jobs were lost again at one of the fastest rates in the last 20 years.”
Politano said job losses in the technology industry now exceed those during the 2008 and 2020 economic downturns. Politano said that historically, the United States usually adds about 100,000 to 300,000 technology jobs every year; even if there is some correction, it usually rebounds quickly. But not this time.
Politano said the current situation is clearly much worse for the industry than the 2020 recession and slightly worse than 2008. He thinks the most appropriate comparison is the dot-com bust, although today’s situation is still not that dire.
“The only thing that can be compared to it is the worst tech job recession in history, and that fact is pretty bad,” Politano said. “Here, the length of time is very important. It’s been three years since the job losses began. It only took about four years from when the dot-com crash started to recover and the tech industry started hiring again at a semi-normal rate again. The fact that we’re now three years in and things are actually getting worse is a really big deal.”
Are you affected by the current tech job market? Contact these reporters at jkaplan@businessinsider.com and mhoff@businessinsider.com.
Of course, as Cory Stahle, an economist at Indeed’s Recruiting Lab, points out, it’s not just the tech industry that’s in trouble. Employment declined in both manufacturing and government sectors, which have been cooling over the past few years. The health care industry, which has been propping up the job market, lost jobs in February, exacerbated by a roughly month-long strike at Kaiser Permanente. “Everything looks pretty weak across industries,” Stahler said.
ZipRecruiter economist Nicole Bachaud said February losses in technology-related sectors were similar to recent trends. “When we look at the information, we see continued declines and then professional and business services, a little bit of softness, but I don’t think it’s necessarily an untimely movement in the industry,” Bachold said. “There’s a lot of headlines focused on layoffs in the tech space or big changes for certain employers in the tech space, but overall the layoff rates are very low and stable.”
