Thousands of Tech Workers Exit Industry Amid Ongoing Layoffs
TECHJOB MARKET
Surge in Tech Layoffs Pushes Workers Toward Other Sectors
Over the past eighteen months, more than 170,000 tech workers in the United States have been laid off, marking one of the most significant contractions the industry has seen in recent memory. The pace of cuts has not slowed in 2025. In the first five months alone, over 74,000 layoffs were recorded across tech companies—representing a 35% increase compared to the same period in 2024.
The scope of job loss is particularly stark in programming roles, where official data shows a 27% reduction in positions between 2022 and 2024. Simultaneously, average salaries for tech professionals have fallen by more than 12% nationwide. These setbacks have prompted thousands of skilled workers to question the viability of long-term careers in the sector.
While some have swiftly rejoined the workforce in similar roles, many now work at smaller, less prestigious firms or for lower compensation packages. Others have sought opportunities outside the traditional boundaries of the tech industry altogether. Career pivots, enrollment in professional development programs, and entrepreneurial ventures are becoming common routes among displaced workers.
Despite the broader U.S. unemployment rate hovering around 4.2% through the first half of 2025, the technology sector has experienced acute turbulence. The tech-specific unemployment rate stood at 3.4% in May, but that figure masks deeper disruptions in hiring—especially at the entry level—and an uptick in precarious forms of employment, including contract work and freelancing.
Roughly half of laid-off tech workers have managed to secure new positions within six months. However, only 32% returned to jobs within tech companies, typically at smaller or mid-tier firms. The remainder have transitioned to adjacent industries. Finance has absorbed approximately 10% of these workers, drawn by continued demand for professionals with systems, data, and security experience. Consulting firms have taken in another 8%, while the healthcare sector—which is undergoing a digital transformation—has welcomed roughly 6%. Others have found positions in manufacturing and logistics, where the implementation of smart technologies has created new technical roles.
Exit Packages Replace Traditional Layoffs
A notable trend among large tech companies is the use of voluntary exit programs or “buyouts” as a means of trimming staff. These packages offer financial compensation to employees who agree to leave their roles, enabling firms to discreetly downsize without the negative publicity of formal layoffs. While presented as voluntary, these offers are often targeted at specific departments or job categories.
Major players such as Google, Meta, and Salesforce have leaned heavily on this tactic over the past two years. Their buyout packages typically include several weeks of additional pay, extended healthcare coverage, and job placement assistance. In many cases, these offers have replaced direct layoffs altogether, but the end result remains the same: a steady reduction in permanent staff.
This shift has contributed to a noticeable uptick in freelance and contract-based employment. Workers are increasingly turning to platforms like Upwork, Toptal, and Fiverr to offer services in software development, systems maintenance, or data consulting. While freelancing offers flexibility, it lacks the financial predictability and benefits of full-time employment. Many professionals use this model as a temporary solution while exploring longer-term career strategies or building new skill sets.
Some former tech employees are opting to start their own ventures. Severance payments or personal savings are often used to fund startups in areas such as educational technology, digital health, or blockchain-based financial services. This form of self-employment, however, is generally limited to those with access to capital, business networks, and entrepreneurial experience.
Migration to the Public Sector and Focus on Reskilling
Government agencies have increasingly become a destination for displaced tech workers, especially in fields related to cybersecurity. Departments such as the Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Defense have stepped up hiring efforts in response to rising threats and digital vulnerabilities.
While government salaries typically trail those in the private sector, they offer benefits that many workers now prioritize: long-term stability, defined work hours, and a sense of public mission. In a volatile job market, these features have proven attractive for workers seeking to apply their skills outside traditional corporate environments.
Simultaneously, there is growing emphasis on continuing education and reskilling. Certifications and intensive training in artificial intelligence, data analytics, and cloud infrastructure are increasingly viewed as prerequisites for upward mobility. Educational platforms such as Coursera, Udacity, and edX have reported surges in enrollment, particularly in technical programs tied to AI and business integration.
Graduate programs focused on business and technology are also seeing increased demand. These trends reflect a broader recalibration in the labor market, where broad work experience no longer suffices. Instead, hiring managers seek niche competencies that align with evolving organizational needs.
Yet, this adaptation process has been far from uniform. Gender and age-based disparities are emerging, complicating recovery for many groups. Women, for example, have faced steeper challenges reentering the workforce—only 31% of laid-off female tech workers secured new employment within three months, compared to 38% of men. Mid-career professionals, too, encounter roadblocks, often struggling with perceptions of outdated skill sets or age-related biases in recruitment.
Meanwhile, new graduates entering the labor market face an increasingly narrow set of opportunities. Entry-level roles have dropped by 50% since 2023, with many companies citing budget limitations and a preference for automation of low-skill tasks. As a result, many young professionals find themselves locked out of the sector just as they complete their education.
A Polarized Tech Labor Market
What’s emerging is a sharply segmented tech job market. At one end, demand remains strong for elite talent in areas like AI engineering, systems architecture, and automation. These roles often command salaries well above $200,000 in competitive markets such as New York and San Francisco. At the other end, the availability of generalist or junior positions has shrunk, eroding traditional entry points into the industry.
This bifurcation is also evident in pay trends. While top-tier professionals continue to enjoy robust compensation, overall average wages in tech have declined, disproportionately affecting those at the start of their careers or in professional transition. This divergence threatens to create a long-term imbalance in the industry’s talent pipeline.
The evolving dynamics pose challenges not only for individual workers but also for institutions. Universities and training providers must reconsider how they equip students for a volatile employment landscape. Policymakers face pressure to develop reskilling incentives, create pathways for intersectoral job movement, and offer social protections for freelancers and contract workers.
Calls for greater transparency in hiring and layoff practices are also mounting. Workers and labor advocates argue that better visibility into workforce decisions—especially around buyouts and automation—can help level the playing field and ensure more equitable access to opportunities.
As the tech sector continues to redefine itself, both workers and employers are navigating a market shaped by reduced headcounts, shifting expectations, and an urgent need for new competencies. Whether through public service, entrepreneurship, or career reinvention, the workforce behind America’s most innovative industry is adjusting to a post-boom reality with no clear roadmap for return.