As Silicon Valley retrenches, a tech talent shift accelerates

Priya Natarajan, a seasoned software engineer, was restless this year and looking for her next career move. She wanted two things: a job where her technical skills would be put to good use in a field that could make “a big impact on the world,” she said.

Natarajan, 36, chose health care. In July, she left Amazon, where she had been for nearly 14 years, to join Optum Labs, a research arm of UnitedHealth Group, a big insurer and health services provider. During the recruitment process, she became convinced that the company was committed to being a leader in using data and technology to improve health care. “I liked the story,” Natarajan said.

In a reordering of the market for tech workers, more technology professionals are looking beyond the well-known Big Tech employers to companies in many other industries that increasingly offer challenging opportunities.

Dispersing talent beyond the major tech companies, some analysts say, should be welcomed. “If this transition redeploys skilled tech workers to other sectors of the economy, that may very well be a healthy development,” said Tim Herbert, chief research officer at CompTIA, a technology education and research organisation.

The trend had been underway before, according to recruiters and labour analysts. But the employment reset in the tech industry, they say, is accelerating the shift. Alphabet, Amazon and Meta aren’t hiring? Well, JPMorgan Chase, Walmart and UnitedHealth are in need of tech talent.

For the first time since the dot-com bubble burst two decades ago, the tech industry is at the forefront of an economic downturn. After frenzied growth and hiring during the worst of the pandemic, the tech sector is going in reverse. Growth has fallen, and stock prices have plummeted. Layoffs, hiring freezes and recruiting slowdowns are the order of the day at a lengthening list of well-known tech companies including Meta, Twitter, Alphabet, Amazon, DoorDash, Lyft, Snap and Stripe, as well as at venture-backed startups.

Still, overall employment in tech occupations has grown this year, to a record 6.39 million in November, according to government statistics reported this month. That was slightly up from the previous month and a 12 per cent increase from November 2021.

Today, a majority of tech jobs are at companies outside the tech sector in industries like banking, retail, health care and manufacturing whose operations are increasingly becoming digital. These mainstream companies, unlike their Silicon Valley counterparts, did not go on manic hiring sprees during the pandemic. But they continue to invest in tech skills.

‘Nearly every company is going through this. They need tech talent,” said Lori Beer, global chief information officer at JPMorgan.

If the economy enters a recession, employment in tech occupations will suffer as well. There are already signs of softness: Job postings may signal hiring intentions, and online postings in November for tech jobs slipped below 288,000, the first month this year that it was under 300,000, according to a CompTIA analysis of data from Lightcast, a labor analytics firm.

Some labour market analysts are anticipating a decline in employment in tech jobs, especially if the economy further weakens. But history suggests any downturn would be short-lived. There have been ups and downs, but job growth in tech occupations has nearly doubled since 2000, when 3.33 million Americans were employed in tech occupations, according to the Bureau of Labor Statistics.

In the aftermath of the dot-com bust, there were a couple of months in 2003 when the unemployment rate for tech jobs nudged above the national level. But for most of the past two decades, the percentage of unemployed tech workers has been about half the national unemployment rate. In November, the unemployment rate for tech workers was 2 per cent compared with the national average of 3.7 per cent .

JPMorgan’s top executives have warned of economic turbulence, deal-making has slowed, and investment banking income is sharply down this year across Wall Street.

Yet despite the uncertain economy, Beer said, the bank is continuing to invest selectively in tech skills, hiring people with expertise in cloud computing, machine learning and artificial intelligence, data science, and cybersecurity.

JPMorgan has more than 55,000 tech workers, up from about 50,000 before the pandemic.

Recruiting has been easier, Beer said, because of the retrenchment in Silicon Valley. More candidates are available, she said, and there are fewer competing offers for job candidates. And attrition has fallen by about half.

“There’s a flight to safety among tech workers,” Beer said.

Collin Peterson joined JPMorgan in Chicago after graduating from the University of Michigan, where he majored in computer science and economics. He left the bank in 2019 to go to a sports data analytics company. But when it struggled during the pandemic, Peterson returned to JPMorgan, where he is now a vice president and engineering manager for cloud computing. “Stability is definitely a consideration,” said Peterson, who has two children under the age of 2.

After years of placing tech workers in jobs at tech companies and well-funded startups, Sherveen Mashayekhi, CEO of Free Agency, is hearing more clients express interest in jobs at large companies in other industries like American Express, Albertsons, Nike and Walmart. “They might have been interesting to some people in the past, but in this environment they’re interesting to everyone,” Mashayekhi said.

– This article originally appeared in The New York Times.