Almost 200,000 Job Cuts in Tech Pushes New Grads to Wall Street

Things have changed in 2023. Tech companies have cut tens of thousands of jobs and lowered compensation for the select few who get offers. That has more young people giving finance a second look. Their thinking goes something like this: with the economy in flux, go to where the jobs are — or at least where fewer have been lost.

“There’s a lot of chaos in Big Tech — we’re seeing a course correction with a lot of firing,” said Amy Lui Abel, a global talent partner at talent firm Lee Hecht Harrison. “But on Wall Street, you work really hard and you make a lot of money. That’s the deal.” 

To be sure, things are looking cloudy far beyond the tech industry. Wall Street has been hit by layoffs, lower bonuses, hiring freezes and the most dramatic banking turmoil since the 2008 financial crisis. Prominent consulting firms, including McKinsey & Co. and Bain & Co., have also cut positions and delayed start dates for some new hires.

But it’s worse in tech. Companies including Meta Platforms Inc. and Amazon.com Inc. have cut tens of thousands of employees each, with the tech industry as a whole shedding nearly 200,000 jobs since October, more than twice as many as finance, according to data compiled by Bloomberg. 

Read more: Global Layoffs Extend Far Beyond Big Tech

With tech companies scaling back, the calculus between Wall Street and Silicon Valley has changed. Tech firms are decreasing offers for new employees, with total compensation packages dropping as much as 25% in March compared with the same time last year, according to Levels.fyi, a site that collects data on industry pay. Plus, the promise of stock options — a way for tech employees to potentially get rich quick — doesn’t seem as appealing after the Nasdaq plunged 33% last year.

This turmoil has young people who dreamed of working in tech, and pursued degrees and internships that put them on a path to major Silicon Valley companies, turning to finance. 

Emily Balogh, 26, always imagined herself at a big technology company, enjoying the perks of a flexible schedule and laid back office culture. But after graduating with a master’s in strategic communication at Columbia University as tech companies were grappling with massive job cuts, she figured finance was more likely to be stable. She got offers at Barclays Plc and American Express Co. and ended up at the credit-card company.

“I really wanted a place where I could see myself in the long term,” she said. 

Anna Martirosyan, 23, moved to New York to pursue a masters in technology management and similarly hoped to end up at one of the big tech firms. She interviewed with Microsoft Corp. and explored companies like Apple Inc., Amazon and Meta. She realized her prospects seemed grim after some potential employers notified her they were no longer looking to fill the roles for which she had applied.

It was a different story at JPMorgan Chase & Co., which had several openings. She eventually landed a gig as a product strategy senior associate. While it’s not what she envisioned when moving to the US from Armenia, Martirosyan said she was drawn to the bank because it offered stability, as well as the flexibility and company culture she craved in tech.  

“During a recession, I don’t think many companies will be able to hold their employees, but I think the finance industry will,” Martirosyan said. 

JPMorgan has been an aggressive recruiter, with its headcount up 8% in the first quarter compared with a year earlier. Morgan Stanley added 7% while Bank of America Corp. saw a 4% increase during that period.

Despite those additions, an ongoing deal slump amid persistent inflation has forced banks to retrench in some places. Morgan Stanley is preparing a fresh round of job cuts this month, with plans to trim about 3,000 jobs from the global workforce by the end of this quarter. Goldman Sachs Group Inc. kicked off a plan to cut about 3,200 positions in January.

Ayani Bilal had two summer internships at Microsoft under her belt, which the computer science major at Hunter College figured put her on the path to a lucrative career at the Redmond, Washington-based company. That is, until the fall of her junior year, when she found herself without a return offer and facing diminishing job prospects. 

So at a tech conference in the fall, she turned to major banks including Bank of America and JPMorgan, where recruiters emphasized work-life balance. She’ll be interning at JPMorgan this summer where she’s earning a higher hourly rate than she received at Microsoft.

“Even when things go poorly, banks make it out all right,” she said. 

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