Are there any anticipations of when the tech market will get better?

The world economy is largely connected to that of the US, and this is especially true for tech. What's happening in the US is that inflation was horrible post-covid recovery, so the Fed needed to drastically hike up interest rates to cool down the overall market. While this did lower inflation (it's all the way down to 2.5% which is pretty healthy), it had a huge negative side effect of slowing down the job market as being able to borrow money at low rates is something businesses do all the time to grow.

There is an upcoming Fed meeting on 9/17, and it's widely believed that interest rates will be cut, either 0.25% or 0.5%. Inflation is mostly in-check, and jobs/unemployment data are getting worse (i.e. less new jobs created, more unemployed people). After this, we will hopefully see the economy return to a state where both inflation and employment are healthy, triggering more rate cuts, leading to more investment, creating more jobs, etc. It obviously won't be immediate (it's not like every FAANG company will 10x their job postings in October), but this hopefully will kick-start a trend where after 6-12 months, things are more "normal".

On top of the interest rate issue, tech companies were also widely inflated during the pandemic as everyone stayed home and spent money on digital goods. Tech companies were drowning in money, so they grossly overhired (e.g. look at Peloton). As the saying goes, "What goes up, must come down", and because tech companies went up so much, they came crashing down. We are still feeling the ripple effects of that as mass layoffs are still common across 2024.

However, there is 1 other big thing specific to tech and that is a little-known tax policy called Section 174. It's pretty complicated, so you can read about it here: https://blog.pragmaticengineer.com/section-174/

In a nutshell, Section 174 was an R&D tax credit meant to empower cutting-edge new businesses, which includes tech startups. In particular, it was meant to encourage hiring by letting you deduct startup employee salaries (including engineers) from your overall tax liability. It was killed in 2023, but it was a poison pill passed by the Trump administration back in their massive 2017 fiscal package. Taro needs to pay an extra $50k+ in taxes every year because of this, money we could have used to hire another person.

The combination of interest rates going up, tech being insanely bloated, and Section 174 being killed led to the incredibly anemic state the tech hiring market is in today. The unfortunate thing is while I'm sure rate cuts will help, I don't know if things will be substantially better without Section 174 coming back.

I feel like everything got really weird after the pandemic, and it's hard to predict anything anymore. Take everything I said here with a grain of salt. 🤷

Follow the advice in Taro, strive to do good work, add value to people, and hope for the best. If you're genuinely doing all that, I'm sure you'll be okay. 😊