The 2024 job market is shaping up to be tougher than expected. Nine months in, we've seen over 60,000 layoffs from 254 companies. Big names in tech—Amazon, Google, Microsoft, Snap, Tesla, and TikTok—have already cut significant portions of their workforce this year. Startups haven't fared much better, with many facing layoffs and some even shutting down.
In August, Intel made waves by announcing a 15% cut in its global workforce—about 15,000 jobs. Just days later, Cisco Systems followed suit, planning to lay off 7% of its staff in its second round of cuts this year as they shifted focus to areas like AI and cybersecurity. Earlier in February, Cisco had already let go of over 4,000 employees.
We won't get into the reasons behind these layoffs here—you can find that in our article "The State of the Talent Market in 2024: Beyond the Headlines and Numbers." Back then, we warned that early BLS jobs reports weren't telling the full story. Now, six months later, 2024 is proving to be one of the toughest years for both employees and job seekers.
In this article, we'll dive into the current state of the job market and explore whether we're moving from a candidate-driven era to an employer's market. We'll break down what this shift means for wage growth, hiring trends, and compensation while looking at how these changes are impacting staffing in both the short and long term.
Tech Layoffs and Talent Demand: Who Holds the Power Now?
Despite a slight drop in the unemployment rate last month to 4.1%, joblessness is still uncomfortably high—levels we haven't seen since late 2021. Hiring has also slowed significantly, with employers bringing on fewer workers than in previous years. According to the latest Labour Department data, job openings in July hit their lowest point since January 2021.
Post-COVID, workers were in short supply, and employers were forced to meet demands on everything from higher wages to flexible work options, fearing their staff would jump ship for greener pastures. But as confidence in the job market wanes, employees are less inclined to quit. In July, only 3.3 million workers voluntarily left their jobs—the lowest number since August 2020 and a 25% drop from the peak in November 2021.
The Biggest Drop in Quit Rates in the Pandemic
Meanwhile, more Americans are taking on part-time or multiple jobs, which some economists see as a sign that full-time positions are harder to come by. The Bureau of Labor Statistics claims most people working part-time are doing so by choice, but the overall landscape has undeniably shifted. We’ve officially entered an employer’s market.
Return to Office Mandates Signal Employers Regaining Control
Adding to the mix is a quieter but equally significant trend—return-to-office mandates creeping back in amid widespread layoffs. Employers are beginning to assert more control, signaling that the era of worker flexibility may be waning.
We began seeing signs of employers exerting more control over how work gets done, back in 2023. Elon Musk famously claimed that remote workers "pretend to work" and are "phoning it in." At the same time, Disney CEO Bob Iger insisted that innovation thrives when people are physically together, saying, "nothing can replace the ability to connect, observe, and create with peers."
Some companies are taking it further. Starbucks' new CEO isn't even based in the same state as its Seattle headquarters, reflecting a trend of top execs living a flight away while regular employees face stricter office mandates. In August, Victoria's Secret appointed a new CEO in New York—despite the company being based in Columbus, Ohio.
Brian Niccol, the incoming CEO of Starbucks, won't need to relocate to Seattle, where the company's headquarters is located. Instead, he's setting up a remote office in Newport Beach, California, conveniently close to his previous employer, Chipotle Mexican Grill. Meanwhile, Hillary Super, freshly recruited from Rihanna's lingerie empire to take the reins at Victoria's Secret, will be making the move from California to New York.
Both execs have signed on for regular commutes. Starbucks is offering Niccol the use of its corporate jet, while Victoria's Secret is footing the bill for Super's travel. They're part of a growing trend of high-profile leaders given the green light to manage companies from miles away, reflecting an ongoing shift in workplace flexibility—at least for the C-suite.
Interestingly, while Niccol gets to split his time between the West Coast and Seattle, Starbucks employees weren't offered the same luxury. Early last year, white-collar workers were asked to return to the office at least three days a week, a decision that didn't sit well with everyone. Niccol, on the other hand, isn't following that same path—his predecessor, Laxman Narasimhan, moved from the UK to Seattle for the role, but Niccol's plan is to juggle both locations while spending most of his time at Starbucks HQ.
Some of these geographic choices are strategic. Take Boeing's new CEO, Kelly Ortberg, who's setting up shop in Seattle, home to the company's vital 737 manufacturing hub, which is currently undergoing a major quality overhaul after a recent near-disaster. Meanwhile, Boeing's corporate headquarters remains in Arlington, Virginia.
In other cases, it's simply about convenience. Scott Kirby, CEO of United Airlines, splits his time between his Dallas home and the company's Chicago base. Similarly, Super isn't the only Victoria's Secret exec living outside Ohio—both the brand president and head of design call New York home.
As work models continue to evolve, it's clear that flexibility in leadership is gaining ground. The question is—how far will it extend beyond the corner office?
Amazon’s Return to Work Mandate: Preserving Culture or Shareholder Value?
Amazon's push to bring employees back to the office has hit more than a few bumps along the way. Earlier this year, employees staged a walkout in protest of the company's return-to-office (RTO) policy, highlighting the growing tension between corporate giants and their workforce over how and where work gets done.
The company issued an ultimatum in Spetember when CEO Andy Jassy announced that corporate employees will need to be in the office five days a week, starting January 2, 2025. This is a big change from their previous hybrid model, which required just three days in the office. The new mandate isn't up for much debate—only "extenuating circumstances" or a green light from an S-team leader will allow exceptions.
Jassy's stance? Pre-pandemic, it wasn't standard for employees to work remotely two days a week, and Amazon is reverting to that mindset. His message is clear: your office is where you need to be if you're corporate.
This mandate isn't just about getting people back to their desks. Amazon is also set to streamline its corporate hierarchy. Fewer managers and a flatter structure are on the horizon. By the end of Q1 2025, Amazon expects each S-team organization to boost the ratio of individual contributors to managers by 15%. In other words, fewer layers of management and more hands-on work.
Amazon saw its workforce rapidly rise during the pandemic, expanding headcount to meet surging demand. But since Andy Jassy took the reins, the company has hit the brakes. Cost-cutting measures have led to Amazon's largest layoffs in its 27-year history, a stark contrast to the hiring spree of 2020 and 2021. Today, Amazon's workforce stands at about 1.5 million—a modest 5% growth from a year earlier, compared to a 14% spike in 2022.
In his latest memo to employees, Jassy emphasized that these shifts are aimed at preserving Amazon's agility and corporate culture. Part of that plan? The creation of a "bureaucracy mailbox" where employees can flag unnecessary processes and rules slowing down the company. Jassy is clear about his vision: Amazon should run like "the world's largest startup," with a relentless focus on innovation, speed, and collaboration.
The tech giant's move to bring employees back to the office and streamline its ranks comes amid a broader trend in tech. Companies are increasingly reluctant to offer remote work perks as the labor market shifts in favor of employers. Some, like Twitter, have even been accused of using return-to-office mandates to nudge employees toward quitting voluntarily, sidestepping costly severance payouts.
This power shift may seem like a win for employers, but it's a risky game. While workers are feeling the squeeze, wary of an uncertain economy, pushing too hard could lead to long-term fallout. Unionization efforts are already gaining traction in response to corporate overreach, and that momentum could continue to build. After all, despite the tightening labor market, even laid-off tech workers are finding new jobs within months, signaling resilience in the face of an increasingly uncertain labor market.
The return-to-office push raises an interesting question: Is Amazon trying to preserve its corporate culture, or is this a strategic move to reassure shareholders and improve value?
Amazon's workforce is buzzing with accusations of a new, more subtle tactic to cut costs—what one employee calls "silent sacking." Justin Garrison, a senior developer at Amazon Web Services, took to his blog to claim that the company is intentionally making work conditions unbearable in an effort to quietly push employees out the door, all without having to deal with the negative press of layoffs or shell out severance packages.
According to Garrison, the strategy is simple: make employees miserable. In his post, he writes, "The negative press associated with layoffs wasn't good. But the most effective way to reduce operational expenses was to get rid of all the expensive people." The goal, he claims, is to drive employees to quit rather than fire them outright—a move that saves the company from paying severance.
This so-called "silent sacking" is essentially another term for "quiet firing," where management creates a deteriorating work environment. Overworked teams, stalled promotions, and a lack of support from leadership all contribute to a culture that encourages employees to resign rather than stick it out. And for Amazon, that means fewer severance packages and less bad press.
Garrison also ties the alleged tactic to Amazon's return-to-office mandate, which he says caused employees to "leave in droves" last year. He claims the policy, along with a general trend of "burning out" employees, has become a key cost-cutting measure for the company.
Layoffs can be a costly move for companies, especially when severance packages are involved. Take Microsoft, for instance—it faced a $1.2 billion expense from layoffs and restructuring during its second-quarter earnings last year.
The Economy and Tech Employment: A Closer Look
The biggest news coming out this week was the Federal Reserve's announcement on Wednesday cutting interest rates by half a percentage point and hinting at two more cuts before the year ends.
This larger-than-usual cut, which is double the usual size, is an indication of the central bank's concerns about a weakening labor market. While the Fed's decision to slash rates is aimed at curbing further rises in unemployment, the timing hints at some election year strategy.
The central bank's announcement also brings a hopeful outlook for the future: officials forecast four more rate cuts next year and two additional reductions the year after, with inflation expected to hit the Fed's 2 percent target by the end of 2025.
The rate decision — the first time the Fed has cut borrowing costs in four years — marks a turning point for the economy that brings the US closer to achieving a so-called soft landing, where economic activity slows enough to bring down inflation without falling into recession. That seemed an unlikely outcome to many economists when inflation was at its peak in mid-2022 and the Fed was rapidly jacking up borrowing costs.
The news that rates are on their way down and that the Fed is acting with some urgency is likely to help drive down mortgage rates, offering relief to companies, debt-burdened households and prospective home buyers. Reduced borrowing costs also could provide some lift to consumers' outlook and, in turn, influence hiring trends in the near term.
That the Fed is cutting rates when unemployment is still relatively low is a victory for the country. But officials expect to lower rates much more before borrowing costs no longer bite into growth, meaning that recession is still possible.
But Wednesday's larger move makes a more significant decline in the job market less likely.
After the announcement, Fed chair Jerome Powell stated at the press conference, "We do not seek or welcome further cooling in labor market conditions."
Fed officials projected that the unemployment rate would stand at 4.4 percent by the end of the year, up from 4.2 percent currently.
On Wednesday, the Fed chief argued that the central bank is not too late to save the labor market from further trouble. However, he signaled that policymakers perhaps wished they had cut in July after a jobs report later the same week showed a jump in the unemployment rate. That helps explain the decision to do a more significant cut in September.
The Tech Talent Arbitrage: What Do Historical Trends Suggest?
When researching past trends of employer-driven markets, particularly in tech, I came across a few interesting data points that indicate it is not all doom and gloom.
In 2000, when the dot-com bust came around, it took nearly two decades for inflation-adjusted markets to recover, and the recession in 2008 before it was near 1999 heights again.
NASDAQ Composite Index of Tech Stocks (Inflation-adjusted, gray indicates recession)
A closer look at the inflation-adjusted numbers indicates that we witnessed periods of market correction in 2015, then again in 2018, and then in 2020 – with speculators calling each dip another tech recession.
Market Corrections: 2015, 2018, and 2020
However, the market has repeatedly pulled up, hitting new all-time highs after corrections.
In fact, 2021 was by far the biggest outlier in terms of the bounce back. Tech salaries witnessed the incredible growth, with top candidates getting multiple offers and 2-3X their last drawn salaries. It was a dream run.
But the dream didn't last.
Post-lockdown shifts in consumer habits hit advertising and consumer tech hard. And then, in March 2022, the real gut punch came—the Fed started raising interest rates to combat inflation. And if you're in tech, you know what that means. Tech stocks, which thrive on future growth, got hit. Higher rates discount that growth, and suddenly those sky-high valuations were plummeting. Money got tight, and tech companies had to pump the brakes. Hiring slowed, and by early 2022, the layoffs began.
Leaders like Zuckerberg at Meta and Sundar Pichai at Google were quick to signal that this wasn't a short-term hiccup. They both pointed to the need for "efficiency." Zuckerberg didn't mince words: "Higher interest rates lead to the economy running leaner... more geopolitical instability leads to more volatility... and increased regulation leads to slower growth and increased costs of innovation."
These are the same companies that fueled tech hiring and compensation growth since the early 2000s. But now, they're standing at a crossroads. On one side, there's the potential for another massive growth wave. On the other, the risk of becoming slow-growth giants, stuck in neutral like so many companies before them.
What’s Next?
Sure, the unemployment rate is expected to increase marginally until the year end, however, zooming out, the new hire rates in 2024 aren't far off from what they were back in 2019. This is a strong indicator that while the tech job market has cooled from the dizzying heights of 2021, it's not completely unfamiliar territory. And the dip in startup headcount, while noticeable, hasn't erased the massive growth of recent years.
What does this mean for workers? People are still employed, but the power dynamic in the market has shifted. Workers are more hesitant to leave their jobs after seeing one in four of their colleagues hired in 2022 fail to last a full year—a 43% jump from the previous year. That stat alone could make anyone think twice about making a move right now.
Entry-level tech workers are particularly vulnerable, with a 25% higher likelihood of getting cut. Another trend? Non-engineering roles in startups were often the first to go, while engineering roles—especially in deep tech—remain crucial to keeping products up and running.
In Q3 this year, we've seen more layoffs and employer assertiveness around how work gets done. It's a reminder that the cuts haven't stopped, but the market may be finding a new equilibrium.
Meanwhile, big tech stocks are performing well, and private company valuations are ticking back up as investors are more hopeful about IPOs after having nearly none in the past 1.5 years.
Over the next few months, we expect employers to be more selective of the talent they hire; however, despite the clear power shift, lessons from the pandemic are still as valuable as ever. Employer branding and attractive employer value propositions (EVPs) will still remain strong drivers of business growth and productivity.
While not looking to jump ship at the moment, candidates are carefully watching every move that companies ascribe to culture building and collaboration.
On the hiring front, organizations are much more likely to begin developing deeper talent pools to prepare for gradual stabilization in the tech sector and consumption-driven growth.
As the disconnect between employer and employee preferences continues, a likely middle ground will emerge. Will this be built on empathy, performance, and objectivity? Only time will tell – it's an ongoing negotiation.
As the right hand to many founders, Shafiur has made operations the secret weapon for many startups. He has built the operational infrastructure and held prominent leadership roles for several companies, including Airbus Aerial, Specright, Connectifier (Acquired by LinkedIn Feb' 16), and Airware. Decades of broad exposure have taught Shafiur which levers make each functional area work and how they must be coordinated for a startup to succeed.
