Followers as Collateral? Layoffs & the Future of Work

The new tech worker is one with multiple jobs and multiple revenue streams

Every day we hear about another tech company laying off thousands of people. Last week, Google let go of 12,000 workers. Under the radar, Spotify laid off 6% of its workforce, Microsoft 10,000 people, it almost seems never ending.

Yet the unemployment has hovered around 3.5% for months. This is a key metric the fed uses to determine if we are headed to a recession. In essence, it acts as a proxy for the health of the US economy.

However, it’s not as relevant as it used to be.

The unemployment rate = # of unemployed workers / # of laborers in the market

The numbers depend on the unemployment claims filed and how many people are “participating” in the workforce. The problem is that the denominator is shrinking while the numerator increases.

Technology, white-collar or “t-shirt” workers, aren’t back in the workforce looking for big tech jobs. Why? Because big tech firms are cutting numbers and are on hiring freezes. They aren’t looking for startup jobs either. Why? Because startup valuations have tanked, equity compensation is underwater, cash is tight, and they aren’t hiring either.

No. These digitally native, highly proficient technology workers are going out on their own. They have become independent consultants and experts, selling their time and prestige to companies who need big tech credibility to tell them what to do.

Additionally, they are sharing their knowledge with massive audiences. Over the past 5 years (and accelerated by the pandemic), social media has transformed from sharing your life with your friends to sharing your knowledge with the world and monetizing your audience (through ads, subscription revenue, consulting, etc.). No generation better understands this than the current college graduates “entering the workforce.”

Ten years ago, career services at a top university would advise students to keep all social media channels “on private” when going through recruitment. Many college students today have public profiles in attempt to grow an audience and develop alternative revenue streams.

When choosing a major, I was told by career services that “Accounting is a safe job to pursue, businesses will always need an accountant.” Now, accounting seems like a risky job and there is a shortage of accountants. Why is accounting risky? Because it requires you to depend on a single revenue stream from one company. Additionally, big accounting firms (and other large corporations) have strict social media policies and precious reputations to protect that they often forbid social media activity from their employees. In simple terms, no side hustles allowed. This is a very risky career move because the company that pays you 100% of your income can shut it off instantly, at any time, and you are powerless.

These newly laid off technology and younger workers who live in digital environments are being discouraged to re-enter the labor force. They don’t want to depend on one company for 100% of their income. Income is no longer a binary switch that a boss can flip up or down. Instead, these workers are developing the portfolio of jobs approach. Income stemming from different sources. To name a few:

• Content creation
• Advertisements
• Consulting work

How will this impact the future of work? Tools will be developed to provide infrastructure to the independent worker. Mainly economical health insurance plans, financial services, and cyber security that cater to individuals rather than enterprises.

For example, banks and financial institutions will have to offer lower-cost checking, payment processing, 401K plans, and loans tailored to an independent, digital worker’s needs. This could be looking at a subscriber list as part of the underwriting process or using a newsletter or YouTube channel as collateral for a loan.

The Future of Work is a more autonomous worker with diversified income streams. Labor participation does not count this cohort of people, but its numbers are only growing. Moreover, businesses and markets will be developed to service this cohort in meaningful and novel ways. So when one company lets you go, your income doesn’t immediately go to zero.