The Reality of Tech Layoffs
The tech landscape, once a bastion of boundless growth, is now marked by a stark reality: layoffs. The year 2024 has continued the trend of workforce reductions, with over 150,000 tech professionals losing their jobs across 542 companies, according to Layoffs.fyi. This has been a wave crashing across giants like Tesla, Amazon, Google, and countless startups, signalling a significant shift in the industry's trajectory. The once-unprecedented hiring sprees of the pandemic era, fueled by the surge in digital demand, have given way to a sobering recalibration, driven by macroeconomic pressures, the rise of AI, and strategic restructuring.
The Consequences of Layoffs
The numbers paint a clear picture: a staggering 167.6 thousand tech employees were laid off globally in the first quarter of 2023 alone, with major players contributing to this record high. While overhiring during the pandemic is a primary culprit, the looming question of AI's impact on workforce redundancies adds another layer of uncertainty. As companies strive for efficiency and cost optimisation, automation threatens to displace roles once considered secure. The contemporary employment landscape is marked by a paradox: while technological advancements and globalization offer unprecedented opportunities, they also breed instability. Layoffs, once considered a last resort, have become a disturbingly routine response to economic fluctuations and strategic realignments. As Sandra J. Sucher and Shalene Gupta highlighted in their Harvard Business Review article, 'Layoffs That Don’t Break Your Company,' this approach is often counterproductive, yielding short-term cost savings at the expense of long-term profitability and employee morale.
Number of tech employees laid off worldwide from 2020 to 2024, by quarter
The Personal and Corporate Impact of Layoffs
The stark reality is that layoffs rarely achieve their intended objectives. Research consistently demonstrates that companies undergoing layoffs frequently experience declines in profitability, increased bankruptcy risk, and a significant erosion of employee trust. The Nokia case study, detailed in the HBR article, serves as a poignant illustration of the devastating consequences of poorly executed layoffs. In 2008, Nokia’s decision to close its Bochum plant ignited widespread outrage, resulting in substantial financial losses and irreparable damage to the company’s reputation. This example underscores the importance of considering the human element in workforce transitions.
Beyond the corporate repercussions, the personal impact of layoffs is profound. The HBR article illuminates the significant personal toll that layoffs take on individuals. Beyond the immediate loss of income, laid-off employees often face long-term earnings reductions, increased health risks, and emotional distress. This human cost underscores the urgency for professionals to seek alternative career paths that offer greater stability and control.
Consulting: A Strategic Career Pivot
Amid this turbulence, many professionals are rediscovering the value of their own agency. As Tobi Ogunnaike explains, transitioning away from the familiar isn’t about one dramatic moment. He recalls, "It's not one crystal clear moment. It happens over time. It's little moments… you’re just trying to find what you care about, your value, what's most important to you. You sort of realize that if you leave, you can always come back—it’s not final." Tobi is an ex-Pinterest software engineer, who’s now done consultancy work with companies like OpenAI and Grammarly. He’s also an advocate for turning your layoff into a successful sabbatical and leads a course on this for other career professionals looking for advice.
In this climate of volatility, professionals are seeking stability and control. Enter consulting: a career path offering not just an alternative, but a strategic pivot. Unlike previous economic downturns, where traditional job searches were the norm, today's professionals are increasingly leveraging their expertise as independent consultants. This shift is driven by the desire for flexibility, autonomy, and the potential for higher earnings.
Tobi himself cites this desire as one of his key driving forces: "I wanted more autonomy in my work and more of an oversay. In my previous job, there was a roadmap, but it wasn’t as interesting or challenging for me." His is a common story.
Consulting allows individuals to monetize their hard-earned skills without the constraints of traditional employment, providing a lifeline in an uncertain job market. As we navigate this era of workforce transformation, consulting emerges as a powerful tool for professionals to take charge of their careers and thrive amidst change.
Why Laid-Off Professionals Should Consider Consultancy
The transition following a layoff presents a unique opportunity for professionals to reassess their career trajectory. Rather than viewing it as a setback, many are recognizing the potential of consultancy as a strategic move. Here's a closer look at why consultancy is an increasingly attractive option:
Leveraging Existing Skills & Expertise:
Professionals who have dedicated years to developing specialized skills possess a valuable asset in the current market. Consultancy provides a platform to monetize this expertise without extensive retraining. By offering their services on a project basis, individuals can function as specialists, providing targeted solutions to clients. This approach allows for the direct application of existing knowledge in areas such as marketing, software development, financial analysis, or project management, offering immediate value to businesses seeking specific competencies.
If you find it difficult to think of an existing skill to leverage, start simple with Tobi’s. Before his journey into consulting, he worked on teams where he was required to work on both design and product marketing, and other teams where he was in a more defined role. These experiences have made him “adaptable” and “able to sway with the winds”.
Your existing skills may also be outside of the work you do. For Tobi, his transition to technical writing was aided by his experiences outside of his work. He recalls “I’ve always written. I have had many newsletters. I had a magazine.” Asking yourself what your non-obvious skills may be, then combining those with your technical skills, can make you a valuable asset.
Enhanced Flexibility & Autonomy:
Consultancy offers a significant degree of flexibility and autonomy, a compelling factor for many professionals. This model allows for the establishment of a work-life balance that aligns with individual preferences. Consultants can determine their schedules, select projects that match their interests, and often work remotely. This level of control over one's professional life is a key differentiator from traditional employment structures, enabling individuals to craft a career that complements their lifestyle.
Potential for Increased Earning Capacity:
While income in consultancy is not guaranteed, the potential for higher earnings is a notable advantage. Consultants are compensated for their specific expertise, often through competitive hourly rates or project-based fees. The fee structures employed by Big 4 firms serve as a benchmark for the value of specialized consulting services. Independent consultants also can set their rates, which can exceed previous salaries. Effective financial planning and business management are essential, but the potential for increased earning capacity makes consultancy a financially viable option.
In contrast to the precarious nature of traditional employment, consulting emerges as a compelling alternative. Consulting allows professionals to leverage their specialized skills and expertise on their terms, offering a sense of autonomy and flexibility that is increasingly valued in today's dynamic work environment. Instead of being subject to the whims of corporate restructuring, consultants can proactively shape their careers, choosing projects that align with their interests and expertise.
The HBR article also emphasizes the importance of companies adopting more humane and strategic approaches to workforce transitions. Companies like AT&T, Michelin, and Honeywell have demonstrated that alternatives to layoffs, such as retraining programs, flexible assignments, and furloughs, can yield positive outcomes for both employers and employees. These examples highlight the potential for companies to foster a culture of resilience and adaptability, rather than resorting to disruptive and damaging layoffs. While larger companies can utilize those methods, consulting allows the individual professional to utilize those same methods on a smaller scale, and their terms.
Moreover, the increasing prevalence of project-based work and the rise of the gig economy have created a fertile ground for consulting. Professionals who have been laid off can leverage their experience and networks to establish independent consulting practices or join established consulting firms. This transition not only provides a means of income but also offers an opportunity for personal and professional growth.
How to Transition into Consultancy
So, you're convinced that consulting might be the right path for you. Great! Now, let's get down to the practicalities of making this transition. It's not just about hanging up a shingle and waiting for clients to roll in. There's a strategic approach involved, and here's how to navigate it:
Identifying Your Niche & Expertise:
The first step is to pinpoint your unique selling proposition. What are you truly good at? What specific skills and knowledge do you possess that businesses would pay for? This requires an honest self-assessment. Look back at your career trajectory, identify your strengths, and consider where those strengths align with market demand. Are you a whiz at social media marketing? Do you have a knack for streamlining operations? Are you an expert in a particular software or technology? Once you've identified your niche, you can start to position yourself as a specialist in that area.
Here’s where Tobi’s advice becomes particularly invaluable. He advises a more thoughtful approach. He says “Instead of doing a hail mary, you can run a little experiment”. He’s seen people feign interest or just be led by impulse and he thinks there’s a better way. In his case, he started off unsure if he really wanted to take this leap, and after 6 months of contracted work through an agency, he had gained a “sense of the kind of work, different kinds of clients and what they care about” through this “really expansive survey”. To this day, he holds the artifacts from this experiment, artifacts that he can use to advertise himself.
Tobi is also very cautious when it comes to the idea of finding your niche. He’s done a lot of different things and says “I think your curiosity can lead you to interesting places”. Again, here’s where he says an experiment is key.
Building a Strong Personal Brand & Network:
In the consulting world, your reputation is your currency. Building a strong personal brand is essential. This involves crafting a compelling online presence, particularly on platforms like LinkedIn. Share your expertise, engage in industry discussions, and connect with potential clients. Networking is equally crucial. Attend industry events, join relevant online communities, and reach out to your existing network to let them know about your consulting services. The more visible you are, the more likely you are to attract clients.
Tobi cautions professionals here as well though. He agrees that LinkedIn is “the channel for (meeting) potential clients” but he also advises against the “weird humble brag” that is pervasive on the platform. Instead, aim for that sweet spot of “trying to potentially get clients but it shouldn’t sound like a bot.” What he definitely advises against is ads at the beginning of your consultancy journey. He says first you need to understand “what people find valuable” and what “kind of questions people are asking”.
He also advises professionals to use “all the platforms but (with) different voices”. He says Substack is great for professional writing and reaching others. He has met a vital support group of like-minded consultants on Substack just through commenting on each other’s posts. To this day, they meet monthly.
On the other hand, Tobi remarks that Twitter is great for finding unique job opportunities, e.g. someone posting a job opening and telling others to message them if they’re interested. He also harkens back to his recommended initial experiment and says “If you’re following the right people, you can see what people are complaining about. You see the challenges people complain about.”. Getting a finger on the pulse is the name of the game.
Setting Up a Consulting Business or Joining a Firm:
Now, the big decision: do you go solo or join an established firm? Freelancing offers maximum autonomy, but it also requires handling all aspects of running a business, from marketing and client acquisition to legal and financial management. Joining a firm provides structure and support, but it may mean less control over projects and fees. Consider your personality, risk tolerance, and long-term goals. If you choose to freelance, ensure you have the necessary legal setup, including business registration and insurance. Regardless of your path, research different pricing models (hourly rates, project-based fees, retainers) to determine what works best for your niche and target market.
When considering joining an established firm, particularly a Big 4 firm, it's important to understand that they typically don't offer explicitly advertised 'layoff pipelines.' Instead, their hiring is driven by client needs and a focus on specific skill sets. This means that professionals who have been laid off, and who possess in-demand skills, are well positioned to be hired. Big 4 firms primarily hire through standard channels, such as online job postings, recruitment agencies, and networking. However, the increasing trend of contract and project-based roles within these firms provides a valuable entry point for those transitioning into consulting. Therefore, networking, highlighting relevant experience, and demonstrating in-demand skills are crucial for securing opportunities within these prestigious firms. Remember that these large firms are very focused on skill-based hiring, which means that those who have been laid off and have up-to-date skills are desirable.
Final Thoughts: Turning Layoffs into New Opportunities
As we've explored, the rise in layoffs, coupled with the evolving nature of work, has positioned consulting as a compelling alternative for professionals seeking stability, flexibility, and career control. By leveraging existing expertise, building a strong network, and embracing a strategic approach, individuals can successfully navigate the transition to consultancy and thrive in this dynamic landscape.
Consulting firms, particularly the Big 4, play a crucial role in this ecosystem. While they may not offer explicit "layoff pipelines," their ongoing demand for specialized skills and their increasing reliance on contract and project-based work creates opportunities for professionals seeking to enter the consulting field. By actively networking, showcasing relevant experience, and demonstrating in-demand skills, individuals can capitalize on these opportunities.
Furthermore, consulting firms can contribute to a smoother transition for laid-off professionals by:
Offering skill-building workshops and training programs: This can help individuals update their skills and align them with current market demands.
Providing mentorship and guidance: Experienced consultants can mentor those new to the field, offering valuable insights and support.
Facilitating networking opportunities: Firms can host events and create platforms for consultants to connect with potential clients and collaborators.
Creating more transparent hiring processes: Clear communication about hiring criteria and expectations can help individuals better prepare for consulting roles.
Ultimately, the rise of consulting represents a shift towards a more agile and adaptable workforce. By embracing this trend, both professionals and consulting firms can navigate the challenges and opportunities of the modern economy.
Tobi calls this the “seasons” of your career. He calls on employees to not completely abandon their previous roles but instead embrace this challenge and see what comes from it. “It’s scary. It’s a lot of fears. It’s a lot of unknowns” but “the scarier thing might’ve actually been staying”. It won’t be easy to begin with. Tobi himself recalls, in the beginning, watching someone he viewed as successful in this work say they’d do “200 outreach and get maybe 5 responses”. He thought then, “This is hard”. But his story is a testament to the opportunity in consultancy. He underlines that, in these dark moments, it’s key to have a community of “people doing similar things (to) commiserate together”.
For professionals facing layoffs, consulting offers a pathway to reclaim control over their careers and build a fulfilling and sustainable future. It's time to embrace the power of consultancy and unlock your full potential.
Check out the work Tobi Ogunnaike is doing on LinkedIn and on his Substack, tobiwrites.com.
References
1. Statista. (n.d.). Tech startup layoffs since COVID-19 2021. [online] Available at: https://www.statista.com/statistics/199999/worldwide-tech-layoffs-covid-19/.
2. Emin Huseynov (2025). The tech industry, once the beacon of rapid growth and high salaries, is now facing a wave of layoffs that has left thousands of professionals seeking new opportunities. Companies that once aggressively expanded their workforce are now scaling back, prompting discussions about what is driving these. [online] Linkedin.com. Available at: https://www.linkedin.com/pulse/tech-layoff-wave-understanding-reasons-whats-next-emin-huseynov-uv6fe/?trackingId=i%2BgsdKiBRxCGh5%2F1svpViQ%3D%3D
3. Loos, E. (2023). How are Big-4 consulting firms different from McKinsey, BCG and Bain? [online] CaseCoach. Available at: https://casecoach.com/b/big-4-consulting-firms-different-mckinsey-bcg-bain/.
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