Sergii Denysenko, CEO, MGID

Remember when the tech industry was fun? Talent used to be lured in and retained with lavish campus-style offices, foosball tables, laundry services, luxury catering, and egg freezing. Fast forward to today, and 2025 has already seen tens of thousands of tech layoffs, following a staggering 150,000 last year and 260,000 the year before.

Cutting headcounts and scrapping perks keeps CFOs and investors happy, but if the tech industry continues to burn through talent, it risks losing its cultural and economic prestige. Once a melting pot of ideas for the future of work, tech companies now cling to outmoded practices that push out bright minds and the innovations they bring.

The macroeconomic masks covering a worker-hostile backlash

Popular explanations for this layoff spree have presented tech companies as being painted into a corner by macroeconomic challenges: rising interest rates; inflationary salary surges; falling demand, a correction of pandemic overhiring, and so on. In many cases, companies genuinely did have to make difficult sacrifices to keep the lights on, with layoffs being an absolute last resort.

While economic factors are a valid reason for some, they are an excuse for others, especially those at the upper echelons of the tech industry. Silicon Valley’s tech titans have been celebrating record profits from one side of their mouths while announcing sweeping job cuts with the other.

The message is loud and clear: tech workers — who were once able to command leverage through their scarcity — are now disposable and can be let go at a moment’s notice. Tech companies used to say to their employees, through their generosity, “We’re lucky to have you.” Now they say, through the threat of layoffs, “You’re lucky to have us.”

This is evidenced not just through the volume of layoffs but their unceremonious rollouts, with people often discovering they were no longer employed when they could no longer log in to Slack or Teams. Then there are the soft layoffs disguised by return-to-office mandates, designed to force out employees who have adapted their lives to hybrid or remote working.

You can’t build on top of a churning workforce

Pre-pandemic, “learn to code” was solid job advice for someone entering the workforce. After all, the tech sector was the place where you could hitch your career to fast-growing and fun companies that offered an optimistic vision of what work could be.

Now, a surplus of workers swarms a shrinking pool of jobs. Unless you’re one of the lucky few who are being swept up in the AI talent bidding war, tech job hunting is a miserable experience, forcing many to leave the sector entirely. As for the next generation of innovators, the tech sector’s new worker-hostile attitude will likely have them looking at brighter horizons elsewhere.

Stock prices may respond positively to layoffs, but if employees don’t feel safe to commit their careers to a company, it can never build up precious institutional knowledge that takes years to cultivate but can be lost overnight. A churning workforce does not provide the stable foundations from which a creative and innovative company culture can grow.

Without a healthy culture, output withers. Technological innovations are not merely logic puzzles that can be solved if enough brainpower (or, these days, computing power) is thrown at them. Even technology grows organically: it’s planted from seeds of human need; watered with human creativity and cooperation; then pruned into shape with human feedback.

Institutional knowledge is not limited to the developers and engineers who get elbows deep in code. It’s found in the customer service teams who have direct contact with users, the sales teams who have learned what makes prospects tick, and the project managers who turn a plan into action.

Lose this human connection, and a company might squeeze out some short-term gains, but long term it will lose the ability to create products and services that meaningfully improve people’s lives. Without it, you get initiatives like NFTs and the Metaverse, pushed by an out-of-touch industry on a public that simply did not care about them.

We see this disconnection in the plummeting public trust in tech companies. We see it in the gradual erosion of the user experience across digital services. We see it in the reckless rollout of generative AI, where Big Tech has shown a total disregard for the technology’s impact on information integrity, copyright law, independent journalism, education, and the planet.

We can recapture tech’s futuristic, humanistic optimism

I don’t want to end on such a bleak note, so here’s the silver lining: the hundreds of thousands of talented tech sector workers discarded by the sector will find new homes. Some will scatter across other industries, but others will band together in new companies and startups that capture the futuristic optimism this sector once thrived on.

For existing companies that put their workers, customers, and the public first, there is an abundance of talent to choose from. Remote and hybrid work means this talent can be more easily found, and we now live in a world where anyone with a computer and an internet connection can become part of a global team. It’s the realisation of the early vision of the internet, where human connection crossed borders and unlocked untapped potential.

After all, the next big innovation is out there in someone’s mind, not buried in a balance sheet.