Navigating 2023 in Tech

I've been meaning to write this for a while now, but I've been caught in... you know, the unprecedented economic conditions that seem to have affected just about everyone these days, especially those of us working in tech. And that's what I want to discuss in this article - what you can do, as someone working in tech, to prepare for next year, which looks to be one of the most difficult yet since the tech bubble in the 2000s.

So what's the deal with this market? Well, even though inflation shows signs of stabilizing and even cooling off, we have seen companies take a huge hit in terms of sales and profitability, leading to many of the consequences that we see today. So let's dive a bit deeper into some of the changes brought in by 2022 and their impact on the tech world.

Lay-offs and team cuts

We've seen this throughout the year, starting with hiring freezes and moving on to 10%+ cuts even among big-name players like Meta, Amazon etc. This is even more obvious for scale-ups, companies like Coinbase, Stripe etc. that hired like crazy when money was cheap but were forced to do cuts to keep profit numbers in check.

Unfortunately, it seems that most companies will experience some sort of reduction over the next year and this might very well involve lay-offs. My biggest recommendation here is to focus on doing your job as well as you can. Now is not the time to slack off. Same for chasing too much additional scope and spreading yourself too thin. You want to put yourself in the best position possible when those discussions inevitably happen. Remember that a company is a business first and foremost and any decision is made through this lens. If you demonstrate that you're an asset to the company, you are giving yourself the best chance to not be impacted.

Even if we don't like it, most of us are reduced to a set of numbers and bullet points when it comes to impact. So stop for a bit and think of your achievements and overall impact in 2022. Does that sound like a compelling list that your manager can use to vouch for you? If it doesn't, you might want to do something about it. If you don't know what such a list would look like, talk to your manager. The point is to be intentional in your output and value to the company, not just show up to work and take any random task from the backlog.

Return to Office

Although this started at the beginning of the year with companies like Microsoft calling people back into the Redmond office, we're really starting to see a lot of companies encourage or enforce an RTO policy. This applies to non-tech as well. Working from home at the start of the pandemic was pretty shocking for many (myself included) and it seems it's the same this time around with the RTO.

I'm a bit torn on the topic - I see advantages in both remote and office work and I believe successful companies in 2023 will need to strike a balance between flexibility and productivity. One thing is certain - there are many situations where having everyone in the same room is far superior to working remotely and identifying those situations is key to a successful RTO policy. Just asking folks to come 3 days per week to the office (or any variation) seems wrong to me. I would focus on calling people in the office in the following scenarios:

Onboarding of new hires. Their first few weeks are crucial and meeting the team and forming those initial bonds is much more powerful in person.
Start of big initiatives. Get the team for at least a week and do a live kick-off. In my experience, the impact on the success of the project is huge.
Close to product releases. If you have a big launch coming up, it might be worthwhile to get the team together and get it over the finish line.
Multi-day trainings or workshops. The effect of doing them live is much greater than a self-paced online approach.

These are just a few examples, of course, I'm sure you can think of many more. The bottom line is this - be flexible, there's no silver bullet here. Be willing to come to work when the situation really benefits from it and also be willing to argue why in most situations working from home is the preferred approach for you, if that's the case. Or if you want to work exclusively from the office, that's fine too. Whatever you prefer, explain the reasoning behind it and consider what's best for you and your team in the long run. You can read more thoughts about the RTO policies here.

Organizational changes

It's very likely that your company or org will go through some sort of resource shifting and re-prioritization in the following period. It's all business driven, of course. The company will redirect its money to the areas that have the most growth and revenue potential. Now you might already be in one of those areas, which is great. But what if you're not? It doesn't necessarily mean that you'll be impacted, but you could.

Business-critical organizations are likely to not see any change. Most other orgs won't see major changes either, maybe a cut or move here and there (usually the low performers) but nothing crazy. But some teams could be completely cut or moved to a different area of the business. So what can you do to give yourself the best chance of not being impacted or having a soft landing? A few tips:

Do your job well. As I was mentioning in the first paragraph, now is the time to double down on doing the best job you can for your role. Be a strong asset that the team and org can rely on and there is very little chance of a negative impact for you.
Develop strong relationships. This is especially useful if you change teams or managers, having a good working relationship with a few folks there can make all the difference.
Work on high-visibility projects. Nobody is going to care if you're doing stellar work on some random project. Try to be part of the company priorities as much as you can.
Go the extra mile. This might be a bit controversial, but sometimes taking that extra task or staying up a bit late can mean the difference between a failed and a successful project. And that project can be the one deciding your overall impact.

Cost optimizations

No matter the industry, it's clear that every company will try to be as efficient as possible in terms of operating costs and other expenditures. What does this mean for you as an engineer? I would say a couple of things:

Focus on optimal solutions. This goes back to our roots as engineers, to not just find any old solution, but a good one.
Reduce costs. This could be something purely engineering such as optimizing the hardware needs (autoscaling), something related to specific tech (replacing one database solution with another), or something on the product side (limiting new or existing functionality that is very expensive).

As cost and overall profitability will be main KPIs next year, leadership teams will look towards sponsoring projects that take this into account. So no matter if you have a more engineering or product mindset, you have a big opportunity to make an impact in 2023.

Maturity & diversity in technology stacks

We've seen technology maturing rapidly over the past few years. Programming languages, frameworks, and tools have become very stable and this enables innovation to flourish. There isn't just one obvious choice of tech for any given project, there are at least two or three.

What does this mean to you? Keep learning. Were you waiting for an opportunity to learn that new programming language or cloud service? Now is a good time to start. If you search on LinkedIn for jobs you'll see a surprising amount of companies looking for knowledge on "newish" technologies, a sign that your Java 8 expertise is not going to cut it anymore in the coming years. A good way to learn is actually at work, from your peers. Check out my article on that here.

Compensation

This is a tough one, especially for those of you who have a large equity position in the company. Most tech stocks have been crushed this year, which lead to compensation packages cut by a large percentage for existing employees. Not only that, new hire packages have dropped as well, meaning that folks that switch jobs are not seeing those 20-30% upswings anymore. It's not only about stocks, most performance bonuses are suffering from the fact that companies are not meeting their growth targets as easily. This means that it's not that hard to find folks that have had their total comp cut in half (or worse).

What does mean for next year?

Cash is king. Try to get your base salary to an amount that you're comfortable with living, even if the other components of the package go to zero.
Options are very risky. Especially for start-ups and scale-ups, don't assume that those options will be worth a lot and especially not in the near future.
Switching jobs is a gamble. It might be the case that you get a solid package with a lot of upside because of the stock, but the risk of being let go at your new company is much higher. Plus you have no way of predicting the equity performance in your new role, don't just assume everything will go up. So don't be afraid of changing jobs, but be very careful.
Diversify. Even if you have an equity-heavy package, it doesn't prevent you from selling a part of it and doing other investments (in the stock market or otherwise). I don't have any particular advice here, so use your best judgment in what you think is a good investment.

So what's coming in 2023?

Frankly, I don't know the answer to that. Nobody does at this point. We'll likely see the global economy continue to struggle and tech companies react to that. It seems that we might have a stagflationary period and 2023 is going to be crucial for a lot of the smaller and medium-sized tech companies.

The good news is that this will force businesses to rethink many of their practices, for the best I believe. And whoever remains standing at the end of next year and 2024 is likely to find a lot of success for the rest of the decade.

What does this mean to you as an engineer? Do your job well, keep your skills sharp, be flexible and adapt to the inevitable changes, develop a strong network and never stop learning. And I think you'll be just fine, whatever comes next.