Tech Layoffs Are Down, So the NYT Has a Major Column Telling Us Tech Layoffs Are Bad

March 21, 2024

The New York Times opinion section seems determined to promote an alternative reality about the economy. Today it featured a column by Ashley Goodall, a former executive at Cisco Systems, telling us why mass layoffs in tech are bad.

While Goodall makes several good points about layoffs being both bad from the company’s long-term perspective, in addition to obviously being bad for workers losing their jobs, there is a fundamental problem with the story. Layoffs are actually down in the tech sector.

The Bureau of Labor Statistics does not have a category defined as “tech,” but the larger information category, which includes most of the areas that would be considered tech, shows that layoffs are rarer than in the past. The discharge rate averaged 1.1 percent in 2023. That compares to 1.4 percent in 2019 and 1.2 percent in the prior two years. We would have to go back to 2016 to see a lower discharge rate in the sector. (The rate fell to 0.6 percent in January, the most recent month for which we have data.)

It’s possible that if we looked to a more narrow sector that could be considered “true” tech we would find a higher layoff rate, but this would mean we are considering a small segment of the workforce. As it is, the 3.0 million people employed in the information sector account for less than 2.0 percent of the workforce or about 15 percent of the number of people working in restaurants. If we whittled this down further to find a sub-sector where layoffs have been soaring, but not enough to move the needle for the larger information category, we are talking about a small group of workers.

There may be a story of large layoffs at a small number of high-profile companies, like Meta, which is highlighted in the piece, but this is not a story that tells us much about the larger economy or the labor market. It is wrong to misrepresent the data this way.


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