Alex Chiou & Rahul Pandey

This course provides a clear, grounded guide to understanding layoffs in the tech industry and navigating them without panic or self-blame. We explain why layoffs happen, how macroeconomic forces and company decisions shape outcomes, and why layoff selection often feels random from an individual contributor’s perspective.

We then focus on what we can control: choosing financially healthy companies and high-impact teams, optimizing performance, building strong relationships, and developing durable, transferable skills that outlast any single role or tech stack. Finally, we cover how to respond if a layoff happens—handling severance and finances, leveraging brand and domain advantages in the job search, building support networks, and using the forced pause to reflect and intentionally choose what comes next.

By the end of the course, we walk away with a realistic mental model of layoffs, a practical playbook for reducing risk, and a resilient mindset for turning uncertainty into long-term career strength.

[Taro Classic] Survive Tech Layoffs As An Engineer

Overview

Avoiding Layoffs

What To Do If You're Laid Off

Signs A Layoff Is Coming

What Are Layoffs?

Why Layoffs Happen

The Effect of Interest Rates

Who Gets Cut In A Layoff?

Don't Freak Out

Choose A Financially Sound Company

Be Deliberate With Team Selection

Optimize Your Performance

Grow Fundamental Skills

Build Up Relationships

There Is Nothing Wrong With You

Verify Your Severance Package

Build Support Groups

Leverage Your Unfair Advantage

Take Some Time To Reflect

We outline the practical signals that can help you tell when layoffs may be coming, especially in tech companies.

- For public companies, a prolonged and severe stock price decline is a strong warning sign, as companies generally can’t sustain operations when shares remain far below their highs.
- For startups and private companies, stagnant growth, hiring freezes, and an indefinite pause on recruiting often indicate belt-tightening ahead of potential layoffs.
- Companies preparing for layoffs frequently cut perks first, and leadership demeanor may shift noticeably through more guarded communication and changes that trickle down to managers.
- Gossip can surface through internal networks or platforms like Blind, but it’s unreliable and stressful, so the most consistent signal is the broader move into an “age of austerity,” where profitability replaces growth and visible reductions in spending become the norm.

We break down what layoffs are, how they differ from firings, and why terminology matters in the tech industry.

Here are the core points from the lesson:

- Layoffs are ad hoc, unpredictable events that cut a large number of employees for economic reasons, unlike regular performance-based cuts where low performers are ranked out.
- Being laid off is generally not the employee’s fault and is different from being fired for incompetence, which is why layoffs—especially in tech—typically come with generous severance packages.
- Most recent “layoffs” in tech are technically RIFs (reductions in force), meaning the company has no intention of rehiring those employees, even though the industry commonly uses the term layoff.

We explain why layoffs happen and why they’re a recurring reality in the tech industry.

Here are the core points from the lesson:

- Layoffs occur when companies face bad economics, often triggered by unforeseen macroeconomic shifts like the post-COVID slowdown after years of stimulus-fueled growth.
- Overambitious hiring is a major contributor, especially when overly positive economic conditions lead companies to scale headcount faster than the business can sustainably support.
- Fundamentally unsound business models and poor strategic direction also drive layoffs, and in practice, these factors usually overlap—making layoffs inevitable since executives can’t make perfect decisions all the time.

We walk through how macroeconomic conditions—especially interest rates—directly affect tech companies and tech workers.

- The federal funds rate guides how expensive it is for banks (and ultimately companies) to borrow money, and while near-zero rates felt normal recently, historically higher interest rates are actually the norm.
- When interest rates rise, the cost of borrowing increases, which makes companies far less willing to invest in long-term bets that may not pay off for several years.
- Because the tech industry is heavily driven by growth funded through borrowing and investment, higher rates trigger spending pullbacks, reduced hiring, and ultimately the contraction and layoffs we’re seeing across the market.

We explain how companies decide who gets laid off and why, from the outside, the process often feels random and opaque.

- There is no universal rule for layoff selection, as decisions vary heavily by company, leadership style, and timing, making it impossible for individual contributors to reliably predict outcomes.
- Common factors considered include performance, the business importance of a team, seniority, and tenure, but each of these can cut both ways depending on company priorities and cost pressures.
- From an individual contributor’s perspective, mass layoffs often feel random because decisions are made quickly, by very few executives, and with incomplete information to avoid panic.
- At large companies, layoffs are often driven by shareholder or board pressure to improve profitability, while startups are guided by burn rate, runway, and investor feedback in a tighter funding environment.
- Layoffs can also be opportunistic, used to trim perceived excess, remove deprioritized teams, or reset perks, with additional randomness introduced by legal safeguards like manager quotas to reduce lawsuit risk.

We emphasize the mindset shift that matters most when facing the reality of layoffs and uncertainty in tech.

- The most important first step is not to freak out, even though layoffs can feel shocking and destabilizing, especially for people who assumed big tech jobs were inherently safe.
- Acceptance is key: layoffs are a normal part of professional life, often driven by factors far outside an individual contributor’s control, including executive decisions and market conditions.
- Obsessing over layoffs or drastically changing your behavior can actually backfire, while staying steady and focused on your work is usually the healthier and more effective approach.
- If a layoff is going to happen, the decision is typically already made, so recognizing what you cannot control can be freeing and allows you to focus your energy on what you actually can control.

We outline the concrete, proactive steps you can take to reduce layoff risk by choosing the right company upfront.

- The most important controllable factor is company selection, with profitability as a key litmus test, since companies that spend more than they earn are far more vulnerable in tighter markets.
- Hiring quality and pace matter: overly easy interviews and hyper-aggressive headcount growth are red flags that often signal overhiring and future layoffs.
- Healthy companies tend to grow steadily rather than stagnate or attempt extreme, unsustainable expansion, especially given the high cost of tech talent.
- Clear product direction and strong leadership are critical, particularly for startups, and can often be evaluated through interviews, vision clarity, and how leaders communicate.
- There are two valid ways to assess company health—analyzing financials directly or reading secondary signals like employee quality, departures, and trusted insider perspectives—and combining both approaches gives the strongest signal.

We explain how team selection within a company can influence both career growth and layoff risk, while stressing the importance of balance and personal fit.

- Team choice is one of the remaining factors within your control, and teams that are important to leadership or closely tied to core revenue are generally less likely to be cut.
- Importance is relative to executive priorities, not just revenue, so understanding what leadership truly cares about is key, especially at companies with strong founder influence.
- Choosing a high-priority team is usually good career advice anyway, since those teams tend to have more scope, visibility, and growth opportunities.
- You should not sacrifice genuine interest or passion just to chase perceived safety, because lack of engagement hurts performance and long-term career growth.
- This guidance is clearer at companies with product-market fit, while earlier-stage startups carry more inherent uncertainty, making stability harder to assess regardless of team choice.

We focus on the most practical actions within your control to reduce layoff risk by becoming a consistently high-performing, high-impact contributor.

- Optimizing performance should be a constant priority, starting with deeply understanding your company’s performance review system and knowing exactly what ratings mean and how they affect your risk and growth.
- Staying calm and avoiding gossip or obsession with layoff rumors is critical, since anxiety and distraction directly undermine performance and effectiveness.
- Maintaining a clear, transparent, and concise dialogue with your manager is essential, because managers advocate for you using only a few high-level impact points.
- Expanding scope and proactively tackling important, ambiguous problems is one of the strongest career multipliers and a key trait of top performers.
- Building a clear professional “brand” on your team—where others can easily articulate what you’re known for and the value you deliver—makes you more visible, promotable, and resilient during layoffs.

We explain why growing fundamental, transferable skills is one of the most powerful ways to reduce layoff risk and strengthen long-term career resilience. Here are the core points from the lesson:

- There is far more to software engineering than coding, especially at scale, where communication, project management, leadership, and relationship-building determine whether work actually ships.
- Over-indexing on a specific technology, language, or product is risky, because teams, systems, and entire products can disappear, while transferable skills allow you to move across teams or companies.
- Engineers who can clearly design systems, think through edge cases, write thoughtful plans, and communicate tradeoffs create outsized impact compared to those who jump straight into code.
- So-called “soft skills” are actually the highest-leverage skills, because they compound across roles, companies, and industries, while technical tools and frameworks inevitably change.
- Focusing your time on high-leverage problems and influence, rather than low-level tooling details, is what drives career growth, adaptability, and durability during periods of layoffs.

We highlight why building strong relationships and social capital is essential for career resilience, especially during layoffs. Here are the core points from the lesson:

- Relationships are a form of social capital, and having people who know you, like you, and will advocate for you can directly influence whether you survive layoffs or get new opportunities.
- Engineers often underinvest in relationship-building by staying heads-down, but proactively connecting with managers, skips, and peers across teams is increasingly important in today’s economy.
- Building relationships doesn’t require forced networking—it can happen naturally through code reviews, coffee chats, offsites, and one-on-ones if you are intentional about seeking opportunities.
- No matter how senior or skilled you are, everyone is expendable, so you should never rely on company loyalty alone and should continuously invest in relationships that outlast any single job.

We close by reframing layoffs as a survivable, even formative, career event rather than a personal failure. Here are the core points from the lesson:

- Being laid off is not a reflection of your ability or worth, since layoffs are driven by executives making decisions with incomplete information and often feel effectively random from an individual’s perspective.
- There is no value in self-blame or overanalyzing what you could have done differently, because once a layoff happens, the only productive move is to look forward.
- With severance as temporary financial runway, layoffs can be treated as a reset point to reflect, recover, and intentionally choose your next step, knowing this is a normal part of a long tech career.

We explain what to do immediately after a layoff to protect yourself financially and legally, and to reduce unnecessary stress. Here are the core points from the lesson:

- Most large tech companies provide severance due to legal requirements and long-term reputational incentives, but layoffs are messy, so you must carefully review all paperwork and verify dates, vesting, and severance amounts.
- Never sign termination documents on the spot; take time to review them, ask questions, and involve a lawyer if possible, especially for severance disputes or visa-related considerations.
- After a layoff, it’s critical to understand your personal burn rate and runway by reviewing your finances, since clarity around how long you can sustain yourself reduces anxiety and helps you plan your next steps.

We explain why building community after a layoff can dramatically improve both emotional resilience and job-search outcomes. Here are the core points from the lesson:

- Layoffs create a natural sense of solidarity, and bringing laid-off peers together helps transform an isolating experience into a shared support system.
- Being proactive about forming or joining support groups—through spreadsheets, LinkedIn, or communities like Taro—creates powerful networks of talented people who can help one another.
- Regular check-ins, shared encouragement, and activities like mock interviews provide structure, accountability, and momentum during the job search.

We explain how to accelerate your job search after a layoff by intentionally leveraging the advantages already on your résumé. Here are the core points from the lesson:

- We should leverage company brand as an unfair advantage, since recognizable names (Big Tech, well-known startups, or respected niche companies) carry trust and credibility that immediately raise our odds versus the average applicant.
- We can increase our chances by targeting adjacent companies, customers, or competitors where our background naturally fits, instead of applying randomly to roles with no contextual advantage.
- We should confidently lean into domain and product association—using the halo effect of teams, products, or problem spaces we worked on—because perceived relevance often matters more than perfect technical alignment.

We wrap up by reframing layoffs as a rare opportunity to pause, reflect, and intentionally design the next chapter of your career. Here are the core points from the lesson:

- A layoff often comes with severance and time, which is an incredibly valuable resource that gives you space to step off the hamster wheel and think clearly.
- Taking days or even weeks to reflect is worthwhile, since deep self-introspection about career direction, values, and long-term goals is difficult but high leverage.
- Being laid off can surface important questions you may have ignored while grinding, including whether you enjoy your role, your function, or even the tech industry at all.
- Boredom and distance from day-to-day work can spark creativity, learning, and exploration that are nearly impossible when you’re constantly shipping and firefighting.
- With persistence, reflection, and conversations with trusted people, a layoff can become a pivot point that leads to a more aligned, fulfilling next step—even if that path looks very different than before.