The tech industry’s boom-bust hiring cycle left tens of thousands without jobs—and damaged trust in top executives

January 27, 2023, 4:23 PM UTC
Businessman carrying box with personal belonging on sunny day
Getty Images

As a recruiter for a large tech company, Niki Woodall relished the thrill of working through the pandemic-driven digital boom of the early 2020s, a period marked by rampant hiring and exciting prospects for sales growth.

Then, in the middle of last year, the landscape shifted. People returned to pre-pandemic habits. Unsustainably low interest rates gave way to inflation. Consumers started pinching pennies in anticipation of a possible recession. And suddenly, tech companies didn’t need all of those employees.

Woodall and thousands of her colleagues were laid off starting in the fall, part of a cascade of job cuts targeting tech workers throughout the industry. (She spoke on the condition that her employer not be named, citing a non-disparagement clause in her separation agreement.) While Woodall said she doesn’t harbor bitterness toward management, the layoffs were a stark reminder of the transactional employee-employer dynamic.

“I think people should come out of this learning and remembering that we have to trust ourselves before anyone or anything else,” Woodall said this week.

The unprecedented rush to ramp up, followed by industry-wide layoffs now totaling more than 140,000 employees, per data tracked by, is producing one of the tech industry’s biggest tests of workforce trust in recent memory. The job cuts are undercutting confidence in corporate leaders who misjudged the economic winds, stressing out staffers looking for new work, and putting remaining employees under the gun to meet recalibrated growth targets.

While the current bloodletting is hardly the first instance of tech turmoil, the circumstances this time around are unique. Between 2019 and 2022, some of the biggest names in tech doubled their workforce, including Amazon, Meta, and Snap. Others were similarly aggressive in hiring, raising their head count by more than 50%. The list included Alphabet, Microsoft, and Salesforce. (One notable exception: the notoriously conservative Apple, which only added about 20% to its employee count.)

In the past several months, however, each of those companies (Apple excluded) has announced job cuts ranging from 1% to 20% of its workforce. While total head count remains above pre-2019 levels across the board, the widespread layoffs are still sending shockwaves through an industry long resistant to burst bubbles.

“Honestly, no responsible company adds 86% headcount over a period of two years. You only do that if you’re not thinking carefully about the fact that it’s people’s lives you’re messing with,” said Sandra Sucher, a professor of management practice at the Harvard Business School and coauthor of The Power of Trust: How Companies Build It, Lose It, and Regain It. “There are spillover effects that will impact people for a very long time and make people less trusting of organizations.”

For high-level tech executives, the job cuts are primarily a matter of dollars and cents. Declining revenue growth and a gloomy outlook on 2023 demand paring back staff and re-focusing hiring on higher-value departments. 

But the retreat will damage some of the goodwill earned through the pandemic when companies generally opted against laying off workers despite the uncertain times ahead. 

In a survey of 1,100 people who had been laid off, the marketing firm BizReport found 60% of respondents were less likely to trust their next employer, and 44% reported having less motivation to contribute at their next job. The survey also showed roughly two-thirds of the nearly 800 respondents who kept their positions amid a round of job cuts reported less motivation, feelings of being overworked, and decreased desire to recommend their company to prospective hires.

Sucher said corporate leaders can retain some measure of employee trust by following a three-step process during layoffs: acknowledging and apologizing for the pain inflicted; detailing the rationale behind the job cuts; and taking meaningful action to help staff members land on their feet. 

Many management gurus, including Sucher, pointed to Stripe CEO Patrick Collison’s detailed message to laid-off employees in November as a trust-building exemplar. Collison took responsibility for the company’s overinflated optimism, outlined the ways in which his leadership team erred, and offered a generous severance package that included career and immigration support.

“An open and full apology can help CEOs to connect with different audiences to show they have a human and authentic side to them,” Will Harvey, professor of leadership at the University of Bristol Business School, told Fortune’s Orianna Rose Royale.

Moving forward, Sucher said it’s incumbent upon tech leaders to reassess their approach to hiring in anticipation of growth. 

“The big questions go into the domain of strategic human resources management, and to having a philosophy of what people mean to you in your firm,” Sucher said.

Woodall, who now works as a self-employed career coach, said many of her former colleagues and recently laid-off clients are embracing resiliency over hostility—though the experience of the past few years has left a few scars.

“The tech folks kind of rode this wave of growth that was exciting, but we didn’t have that long-term experience to lean on, that historically this stuff does happen every 10 to 15 years,” Woodall said. “I think it’s kind of an opportunity for us to deal with the reality that this was business, and in the market, things are always changing.”

Jacob Carpenter


This week’s top headlines from Fortune that touch on key issues of corporate confidence and accountability.

What the average 29-year-old business school student really wants out of a job, according to a survey across 72 countries
Cash is still king for business school students considering prospective employers, making salary transparency in job postings all the more important, Fortune’s Orianna Rosa Royle reported. “Comparison of jobs is easy in today’s world; thus, a lack of transparency will lead to a lack of trust,” said Jan Malte Jeddeloh, a postgraduate student at ESMT Berlin who surveyed more than 600 business school peers across 72 countries on their job priorities.

CEOs are wrong about employees wanting to WFH—they actually want the best of both worlds
An analysis of 7,000-plus job postings by the employment site Flexa Careers found ads for positions with “core hours”—which typically require staffers to work some set hours and complete other tasks at their leisure—rose significantly in the past year, Fortune’s Jane Thier reported. The arrangement provides flexibility and demonstrates trust in employees, while also producing some of the benefits from in-person work.

Despite cybersecurity being top of mind for the C-suite, data privacy is lagging, a new report finds
A lack of qualified staff and insufficient investment by corporate leaders continue to plague digital trust teams, resulting in risk mitigation and legal compliance lapses, Fortune’s Sheryl Estrada reported. A survey conducted by ISACA, a professional IT governance association, showed data privacy professionals feel under-supported by executives responsible for building and maintaining their departments.

Half of the world’s population is under 30–but they have little say over the decisions that shape their future. It’s time for young people to be seen and heard in the halls of power
David Boynton, CEO of The Body Shop, and Marija Vasileva-Blazev, special adviser to the U.N. secretary-general’s envoy on youth, wrote in a Fortune commentary that voters believe in Gen Z’s ability to address global issues, but young people aren’t getting enough opportunities to hold positions of authority. “Young people are energetic, thoughtful, and positive about the future—and the wider public clearly trusts their views on the major issues of today,” Boynton and Vasileva-Blazev wrote.


A weekly look at how one company is tackling a particularly thorny topic that could undercut faith in its organizational foundation.

Selling more than sex. OnlyFans CEO Amrapali “Ami” Gan has one of the toughest jobs in tech: maintaining the trust of adult performers and sex workers who make up the core of the subscription content company’s business, while also appealing to more buttoned-up types who could help bring the platform more into the mainstream. As Fortune’s Emma Hinchliffe reported, it’s a balance that Gan, the company’s former chief marketing and communications officer, has walked with mixed results to date. After a quickly reversed move by OnlyFans’ former CEO to ban sexually explicit content, Gan has regained the faith of content creators powering the billion-dollar business by supporting their endeavors and conversing easily with them. Still, OnlyFans hasn’t caught on as quickly with the safe-for-work crowd—even as it receives praise for its data privacy practices.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet