The Surprising New Cities Tech Workers Are Flocking To (It’s Not Silicon Valley Anymore)

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The Tech Industry’s Great Shift: Layoffs, Labor Migration, and New Horizons

A Wave of Layoffs Sweeps Tech

Over the past 18 months, the U.S. tech sector has faced a seismic shift, with more than 170,000 workers losing their jobs. In the first five months of 2025 alone, over 74,000 layoffs were recorded—a 35% surge compared to the same period in 2024. Major players like Meta, Google, and Salesforce have made unprecedented cuts. Meta, for instance, slashed 11,000 positions, roughly 13% of its workforce, marking its largest reduction ever. The programming field has been hit especially hard, with 27% of jobs vanishing between 2022 and 2024, according to industry reports. Meanwhile, average tech salaries have dropped by over 12% nationwide, prompting many to question the industry’s long-term appeal. Jeffrey Hinton, a pioneer in artificial intelligence, has cautioned that some roles may face even greater disruption as AI continues to evolve.

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Where Are Tech Workers Going?

These mass layoffs have not only reduced headcounts but also sparked a significant labor migration. Highly skilled professionals are now exploring opportunities beyond traditional tech hubs. While some have joined smaller firms or startups—often at lower pay—others have pivoted to entirely new sectors. According to data, only 32% of laid-off tech workers returned to tech roles, typically at smaller or less established companies. The rest have transitioned into fields like finance (10%), consulting (8%), and healthcare (6%), which are undergoing rapid digital transformation. Manufacturing and logistics firms, increasingly reliant on smart technologies, have also absorbed talent.

For example, healthcare giant Abbott has hired over 200 tech-specific employees in the past six months and plans to onboard hundreds more. The public sector is another growing destination, with agencies like the Department of Defense and Cybersecurity and Infrastructure Security Agency ramping up hiring for cybersecurity roles. These positions offer stability, long-term benefits, and a sense of mission, though salaries are generally lower than in the private sector.

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The Rise of Freelancing and Entrepreneurship

The decline in traditional tech jobs has fueled a surge in self-employment. Platforms like Upwork, Fiverr, and TopTal have become go-to channels for tech workers offering services in software development, data analysis, and system maintenance. While freelancing provides flexibility, it often lacks the stability and benefits of full-time roles. For many, it’s a stopgap while they reskill or plan their next move.

Entrepreneurship is also on the rise. Laid-off workers with experience and access to capital are launching startups in areas like educational technology, digital health, and decentralized finance. Severance packages from companies like Google, Meta, and Salesforce—which include extra pay, extended benefits, and job placement assistance—have provided a financial cushion for some to take this leap.

Buyouts: A Quiet Layoff Strategy

To avoid the negative publicity of formal layoffs, many tech giants have turned to voluntary buyouts. These programs offer financial incentives for employees to leave, often targeting specific roles or departments. Google, for instance, has rolled out buyouts across divisions, including its search, ad, and commerce units. While framed as voluntary, these offers can feel like a nudge out the door for many workers.

Reskilling for a Changing Market

As the tech job market grows more competitive, continuous education has become critical. Professionals are flocking to certifications and programs in high-demand areas like AI, cloud computing, and data analytics. Platforms like Google Cloud, TensorFlow, and Python courses have seen booming enrollment, alongside university graduate programs blending technology and business. This reflects a broader trend: general tech skills are no longer enough in a market that prizes specialization.

AI, in particular, is reshaping industries—from self-driving cars to cancer detection—driving demand for expertise in machine learning and systems architecture. However, the job market is increasingly polarized. While senior roles in AI and advanced automation command salaries exceeding $200,000 in cities like San Francisco and New York, entry-level and generalist positions are shrinking, leaving new graduates and mid-career professionals struggling.

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Uneven Recovery and Structural Challenges

Re-entering the job market has been uneven. Only half of laid-off tech workers found new roles within six months, and women have faced steeper hurdles, with just 31% securing jobs within three months compared to 38% of men. Mid-career professionals often encounter biases about outdated skills, while recent graduates face a 50% drop in entry-level openings since 2023. The unemployment rate for college graduates reached 6% in mid-2025, nearly 2% above the national average of 4.2%.

The tech sector’s specific unemployment rate hovered between 3.4% and 4% in May 2025, but this figure masks reduced hiring and a rise in precarious work like freelancing or temp contracts. Companies cite budget constraints and automation of low-complexity tasks as reasons for these trends, creating a divide between highly specialized roles and those accessible to newcomers.

A Call for Systemic Solutions

This transformation poses challenges not just for workers but also for educators and policymakers. There’s an urgent need for reskilling programs, incentives to hire new talent, and protections for independent workers. Transparent layoff and hiring practices, along with mechanisms to support labor mobility across sectors, are also critical to leveraging this skilled workforce.

As the tech industry navigates this period of upheaval, workers are forging new paths—whether in different sectors, as entrepreneurs, or through public service. The question remains: can the ecosystem adapt to ensure these transitions lead to sustainable, fulfilling careers?

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