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Stock prices have plunged around the world, with the tech sector particularly badly affected. What should those working in the industry think?
Global markets have been a sea of red following vast selloffs of high-value tech stocks and a weakening US economy that appears to have triggered a massive economic course correction this week.
Chipmaker Nvidia’s stock price has dropped nearly 20% in the last month, while Microsoft’s has tumbled nearly 15%. Amazon is down by a fifth in the last month, while Apple has dropped by nearly 10%.
“We are getting inbounds from investors around the world asking us if this tech bull market and historic run for tech stocks is over,” says Dan Ives, managing director and senior equity research analyst at Wedbush Securities. “It’s not in our view, and this is just a white knuckle moment in a multi-year bull run for tech stocks that need hand-holding.”
What’s causing this?
Headlines have heralded the huge slides as a stock market crash, of which tech is bearing the brunt. This is in large part because the stock market has become overexposed to a set of tech companies – particularly the Magnificent Seven of Alphabet, Amazon, Apple , Meta, Microsoft, Nvidia and Tesla.
Now, stubbornly high inflation, an impending US presidential election, and concerning jobs and payroll data, have prompted fears that the world’s biggest economy could be headed for a recession.
“The market has been volatile since Covid – first with huge employment gains and then with substantial losses,” says Rachel Cohen, chief operating officer at Silicon Society, with many developers already feeling the effects of the end of an era of hypergrowth.
The impact on developers
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This economic uncertainty is likely resulting in smaller departmental budgets, demands to do more with less, and a continued slowdown of startup funding.
But should developers – who have already faced nearly 126,000 lost jobs across 387 tech companies so far this year, according to Layoffs.fyi – be braced for further pain? Especially those who get paid in stock options?
“We’ve had a really, really good run of maybe 10 or more years of tech jobs, and it does sort of feel like a reckoning,” says Nish Junankar, a senior software engineer at Squarespace, who previously worked for OpenSea.
“Personally, I’m not that worried, but I think the general feeling is pretty worried,” Junankar says. His wife’s friend has been struggling to find a job for six months, while others who are seeking jobs have been reaching out to Junankar to try and find referrals.
“My feeling is it’s reinforcing what we’re seeing in how hard it is to get a developer job,” he says. Many companies were cutting jobs while their stock price was rising, so there could be tougher times to come.
Cohen advises not to panic though. “Developers should react to the stock correction we’re seeing today with the same strategies they have employed over the past three-plus years,” she says.
Staying employable
That would involve keeping technical skills fresh, staying in touch with your professional network, and engaging with the broader engineering community.
“Developers who maintain these career-long best practices will ensure that their careers are recession-resilient,” says Cohen. “Days like today in the stock market are a reminder that even in very marketable professions, such as engineering, professionals must take the time to invest in their skills and networks so they can bounce back quickly and often.”
Things are likely to get worse before they get better, but for those concerned for their future, Ives has some supportive words. “We have battled through this bull-bear debate a number of times over the past few years, as well as the last 24 years covering tech stocks on the Street,” he says. “Our view is that it’s a soft-landing environment.”
