How Economic Changes Impact Engineering Hiring

This morning's JOLTS (Job Openings and Labor Turnover Summary) report from the Bureau of Labor Statistics showed that the #labormarket cooled further in late 2023. This will be no surprise to those of you in the #recruiting industry. A few important #data points to highlight: 👨💼 At 8.8 million, the number of open #jobs in November changed little from the previous month. However, this figure is a long way (-27%) from March 2022 levels, when there were an astounding 12 million open jobs in the US. The current number of openings is the lowest since March of 2021. 👋 Quits were at the lowest level since September 2020. The number of #quits edged down by 157,000 to 3.5 million, with the largest decrease in professional and business services (-77,000). The Great Resignation is in the rear-view mirror. ✌ In November, the number of #hires decreased by 363,000 to 5.5 million. Professional and business services were also the largest standout in this category, with the sector hiring 163,000 fewer people than the previous month. Alex's Analysis: I've spoken to many individuals in the last few months that experienced the deterioration of labor market conditions firsthand - on the employer, recruiter, and candidate sides. Companies are pumping the brakes on adding headcount heading into 2024, while job seekers looking for sales, engineering, and mid-level management positions are spending a lot longer, on average, looking for work. Expect this trend to continue into mid-2024 at minimum, and possibly into the latter part of the year as well. The business cycle needs to transition from deceleration to rise, which will likely require a lowering of interest rates by the FED, before the labor market can shift into a higher gear. Plan accordingly.

For the first time in over a decade, workers who stay in their jobs are seeing stronger wage growth than those who make a change. That’s not because people suddenly stopped wanting higher pay. It’s because the economy and labor markets look very different this year. Here’s how:   1. Layoffs are happening. The July Challenger Report counted 806,000 cuts in the first half of 2025, driven by tech, AI adoption and tariffs. With fewer openings, employers don’t need to pay a premium to poach talent. 2. People are leaving their jobs for different reasons than before, and pay isn’t always the top driver. People are making moves for culture, career development and remote flexibility, even if it means a smaller paycheck. 3. Tariff threats created short-term demand for cars, electronics and some retail goods, but they didn’t create lasting jobs. Wage growth for job hoppers began to decline in February, just as the tariff disruptions started. That doesn’t seem like a coincidence. 4. AI is taking its toll on early-career roles. A recent paper from researchers at the Stanford Digital Economy Lab found a 13% decline in employment among early-career workers in AI-exposed fields. The authors note that losses are concentrated where “AI automates rather than augments work.” Software engineering and customer service are two examples. Given the early-career nature, many may not even be reflected in unemployment data. It used to be that people would switch jobs and get paid. That’s no longer the case. It’s hard to say if stability will pay off more than churn in the short-term (it hasn’t historically), but today’s differentiators of culture, career growth and resilience could be having an impact. https://lnkd.in/gGtPfBWD  

The jobs market in the US is getting worse, and it's the tariffs and economic uncertainty--not primarily AI--that's to blame. Updating my column from a couple of weeks ago: 🔴 Mentions of "uncertainty" in earnings calls up 4X, above the pandemic peak. Businesses who are uncertain at a minimum stop hiring and investing. 🔴 Layoffs increased 39% from July's huge spike. What's behind it? Market conditions, declining demand, businesses closing and DOGE. 🔴 AI is more of a bogeyman than a reality in the broader market. Year to date, the combination of technology, AI and basic cost cutting amounts to 6% of cuts. The loudest voice for AI-driven job losses this week came from Salesforce, where 4k people were laid off (many not in customer support), a company who also sells AI solutions to automate customer support. Even in Big Tech, layoffs seem to be more driven by a need to hit earnings while investing massively in AI. Data from SignalFire through end of August showed net growth in engineering almost all big tech firms, with the notable exception of declining headcount at Bloomberg, Walmart and Tesla. What's taking jobs isn't AI directly, it's the market uncertainty and tariffs. 👉 Read on for more data and analysis: https://lnkd.in/gbwYyV2H