The U.S. tech industry has faced massive layoffs and declining salaries, prompting many displaced workers to migrate into smaller tech firms, other industries, freelancing, entrepreneurship, and public sector roles, particularly in cybersecurity. This shift has created a segmented job market with high demand for specialized senior roles but limited entry-level opportunities, highlighting the need for reskilling programs, hiring incentives, and better support for independent workers.
Over the past 18 months, the U.S. tech industry has experienced significant job losses, with over 170,000 tech workers laid off. The trend has accelerated in early 2025, with more than 74,000 layoffs recorded in the first five months alone, marking a 35% increase from the previous year. Major companies like Meta have conducted unprecedented layoffs, cutting 11,000 jobs, about 13% of its workforce. Programming roles have been particularly affected, with 27% of jobs disappearing between 2022 and 2024. Concurrently, average tech salaries nationwide have dropped by over 12%, prompting many workers to reconsider their career paths in the industry.
These mass layoffs have triggered a notable labor migration, with many displaced tech workers seeking opportunities outside traditional tech firms. While some have found roles in smaller tech companies, often with reduced pay, others have transitioned into different sectors such as finance, consulting, healthcare, manufacturing, and logistics. Approximately half of those laid off reentered the workforce within six months, but only about a third returned to tech companies. Meanwhile, companies outside the core tech industry, like Abbott, have been actively hiring tech talent, reflecting a broader demand for tech skills across various fields.
In response to workforce reductions, many large tech firms have adopted voluntary exit programs or buyouts, offering financial incentives for employees to leave discreetly. This approach helps companies avoid negative publicity and reputational damage. Additionally, the decline in traditional tech roles has spurred a rise in self-employment and freelancing through platforms like Upwork and Fiverr, providing flexibility but often lacking financial stability and benefits. Entrepreneurship has also gained traction, with some former tech workers launching startups in emerging areas such as edtech, digital health, and decentralized finance.
Another significant trend is the migration of tech professionals into the public sector, particularly in cybersecurity roles within government agencies like the Department of Defense. These positions offer greater job stability, long-term benefits, and the opportunity to contribute to national security, despite generally lower salaries compared to the private sector. To remain competitive, many tech workers are pursuing further education and certifications in high-demand areas like artificial intelligence, reflecting the growing importance of advanced technological skills across industries.
However, the transition back into the job market has been uneven, with disparities based on gender, age, and experience. Women and mid-career professionals face greater challenges securing new roles, while recent graduates encounter a shrinking entry-level job market, with openings down 50% since 2023. This has led to a segmented tech job market, where high demand exists for specialized senior roles, but opportunities for entry-level and generalist positions are limited. The situation calls for enhanced reskilling programs, hiring incentives, social protections for independent workers, and improved transparency in hiring and layoffs to better support this highly skilled workforce.