Layoffs.fyi, the layoff statistics site, shows that more than 100,000 technology employees have been laid off in Silicon Valley this year, including by giants like Meta, Twitter and Amazon. As chief engineer at TruEra, a startup in the field of artificial intelligence in the U.S., and founder of the Viet Tech community, what do you think about this?
Actually, I’m not too surprised because I think the number should have been much higher. If the economic situation does not improve next year, other problems will arise. The next layoff will be worse than the first one.
I think the number released by Layoffs.fyi is quite accurate because each of the big companies such as Amazon and Meta contributed tens of thousands. I even think the actual number could be 150,000.
My own company is a much smaller startup, so we don’t have layoffs. Normally, we face an employee shortage. During the recent Covid outbreak, big tech firms hired on a large scale because they thought after the pandemic there would be an economic boom with everything going up and never down.
But in reality there isn’t. They’re public companies with shares issued and listed, so they face pressure to sack people to improve their financial situation. Normally, it is difficult for common startups to recruit staff. Now, when large companies lay off employees, smaller firms can recruit them. For small companies, it is actually a good time to hire people now.
In your opinion, which group is most affected by the tech layoffs?
The group most affected and I feel the most sorry for is probably young people who have just graduated or are about to graduate. When companies don’t recruit staff, they don’t hire anyone. First of all, they don’t recruit new graduates. Most startups just want to hire people with work experience who can do the job right away. Big companies, too. If a big company stops hiring, it often prioritizes stopping recruitment of new graduates first. New graduates need to be trained; it will take time for them to start working effectively.
The second group most affected is those who work here on H-1B visas. Most tech people working here are on that kind of visa. Once the visa holders are laid off, they have only 60 days to find a new job. Failing this, they are required to leave the U.S. for their home countries. After returning to Vietnam, it is very difficult to return, right? Normally it takes about 1-2 months to prepare for interviews, and then it takes the same period of time to go for an interview.
The founder of the Vietnam Tech Society estimated that some 1,000 Vietnamese engineers were affected by this layoff. What do you think about the figure? How have Vietnamese been affected?
I see many Vietnamese in this tech industry being affected, but I don’t know the exact number because there are no precise numbers. The founder estimated that 1,000 people were affected, but I think it must be much higher.
There are many Vietnamese people in the U.S., and many Vietnamese work in the tech industry. But I think this layoff is just in line with the economic cycle. When the economy goes down, these things will inevitably happen, not because you are bad or anything but just because the economy is bad and companies have to make difficult decisions.
Vietnamese engineers are the same as engineers in other countries. In fact, whoever can do the job is recruited and respected. I don’t see much difference between Vietnamese and foreign engineers. Laid off engineers in fields other than technology will find it much harder to get a new job. So, in fact, tech workers still have a huge advantage compared to those in other fields. Now the tech industry is facing a little difficulty because it went up strongly in the past. Now it is going down.
I found that Asian engineers in general are very hardworking and work quite well. I think it’s going to be okay. There will be layoffs; there will be ups and downs; and there will be times when companies have to decide to lay off. But eventually everything will be back to normal, especially when most people are working pretty well. I don’t think it’s a big deal.
Many experts believe that famous foreign tech talent in Silicon Valley have houses and cars but their cash is limited. When there are no jobs, they still have to make ends meet. So what’s the situation like?
This is not correct. In Silicon Valley, a fresh graduate can easily get a job with an income of more than $100,000 per year. It is not too difficult to get $200,000 a year from big tech companies like Google, Facebook and Amazon.
With such a salary, minus taxes of 30%, they still have some $70,000, completely enough to live on. Anyone who says that laid off tech people have no money or have to live from hand to mouth has never worked as a tech person or has stood outside looking in. I don’t see any tech guys complaining about not having money to live by.
Fresh graduates can earn $100,000-200,000 a year, or maybe less if they work for smaller companies. After about two years of experience, their income is around $300,000, and with two more years of experience, it is $400,000-450,000. With more years of experience, it is up to $600,000-700,000. With such an amount of money, it is very hard for them to have any problem unless they have done something very, very wrong.
But it is obvious that, if you are earning some $600,000 and your firm suddenly fires you, it will be hard for you for a while, but not to the extent and not as miserable as some people in Vietnam think.
Being fired is a bad thing, right? But actually, the compensation you get when you get fired in the first layoff is usually better than later ones.
Some companies like Meta offer four months’ salary. I know that some other companies like Snapchat offer two or four months’ salary. So that’s a really good deal for sacked people.
Engineers in tech companies not only get salaries, but also bonuses. And what is more important is the shares the companies give them like in Vietnam. I used to work in Vietnam where employees are paid a 13th month’s salary and Tet bonus.
But it is a little different here. In the tech industry, in addition to monthly salary, you have the company’s stock. Usually its market value is equal to the salary, so the sum of money is good.
Obviously, it is very difficult to find a new job. People have to prepare for job interviews, but I think they will find a new job, because the market is not short of jobs. It is just difficult for people who do not want to prepare for interviews or want to work only for certain companies. There is no shortage of jobs in general.
It is not easy to find a new job within 60 days, but if you have experience, it is completely doable. If you have no experience, it will be fairly easy during this period of time.
I think there are always ways to overcome all difficulties in life. Always.
Tech companies in Silicon Valley mostly recruit foreign talent through the H-1B visa policy. The visa was once considered Silicon Valley’s tech talent reserve. Do you think that this round of layoffs poses a risk of drowning tech talent?
Small groups will be affected, right? As I said earlier, undergraduates and new graduates are affected for a short period of time. In reality, they have their own directions. For H-1B visa holders, they will have other ways to continue to stay in the U.S., or continue to get the visa. There will always be a way out. It may be much more difficult than in the previous period, but there will always be a road to keep walking if you want to stay in the U.S. and to continue to work. They include accepting new jobs with lower pay and going back to school.
I don’t think tech talent will get drowned. It is not so bad.
What consequences will the layoffs have for Silicon Valley and the U.S.?
Every year the U.S. issues 65,000 H-1B visas. The latest layoff affected about 150,000 people, but not all of them have H1-B visas. So that number is not big enough to affect the future of Silicon Valley. There are a lot of tech people in Silicon Valley in particular and many more in the U.S. in general. America has always been a very big tech hub of the world. Silicon Valley has always been a hub that attracts tech talent.
With the 150,000 laid-off people, assuming that some 10% of them, or 15,000-20,000, have to go back to their native countries, it will not have a big impact.
Labor shortages have happened in the past, are happening now, and will possibly happen in future, but 20,000 people is just a drop in the bucket. A company like Meta last year seemingly hired such a number of people. So if they have to return to their home countries, it does not matter too much.
There are some other contributing factors, like venture capital funds. I see that some big venture capital funds pumped less money into startups over the past six months, but then started pumping again when there was a wave of generative artificial intelligence. Silicon Valley will have new technologies. Then there will also be new inventions, then everything will return to the old trajectory, money will still be pumped in, people will be recruited, assets of companies in Silicon Valley will increase as before…
I do not know about the distant future, but I think in the near future, after this period when the economy bounces back, the stock market goes up again, and companies no longer face the pressure to lay off, the tech industry will be back to normal.
I strongly believe that in the next 2-5 years, everything will return to the way it was, everything will go up again.
Given the current situation, what will you advise new graduates or those who are applying for tech firms?
This is the worst time for them to graduate now, so options are very simple. You do not have to graduate, right? You can continue to study for a master’s degree, or a PhD degree. Obviously, if you have a job, just go to work, do not wait. Take many interviews at many companies. You should accept many different offers. Do not just take one offer and then stop. Nowadays, many companies make an offer and then withdraw it.
I think you should choose a company with good financial potential, which is performing well, making a lot of money, having no pressure from shareholders to sack people or cut costs.
The second direction is choosing startups that have full funding. The simplest option is choosing startups which have just raised funds. Such companies will not have much pressure to lay off employees.
There are a lot of ways. You have to open your mind a bit more. Do not think the U.S. is the only destination. Do not think it is obligatory to work in Silicon Valley. It is a very good place to work, and to develop your tech career. But if that option is not good right now, there are other options that are ok. They are not so bad.
Singapore, Canada and Europe are all very good options for career development, personal development, family and other issues. Then you can go back to the U.S. later. It is not a big deal. It will be much more difficult but not impossible to achieve.
