According to Wikipedia, a recession is a business cycle contraction when there is a general decline in economic activity. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic).
A recession has an effect on every business.
Software engineer’s are one of the worst hit professionals during economic crises like recession. Because most of the software developments happen around financial sectors and if the market is impacted then the financial services will get hit first and that impacts the software professionals jobs.
This is the third major impact to the financial markets in the last 20 years.
The first one was the September 11 attacks in 2001.
The U.S. economy was already suffering through a moderate recession following the dotcom bubble, and the terrorist attacks added further injury to the struggling business community. The 9/11 terrorist attacks on America caused significant economic damage in the immediate aftermath, rippling through global financial markets. Airlines and insurance companies took the hardest immediate hit, and U.S. stock markets initially fell more than 10% in the days after. Despite its lasting impact on the American psyche, the economic and financial impact of 9/11 was fairly muted, with markets bouncing back months after to new highs. This was helped, in part, by a resilient American economy along with support and stimulus from the federal government.
The second major impact to the markets was the 2007/2008 subprime mortgage crisis.
The financial crisis, a severe contraction of liquidity in global financial markets, began in 2007 as a result of the bursting of the U.S. housing bubble. From 2001 successive decreases in the prime rate (the interest rate that banks charge their “prime,” or low-risk, customers) had enabled banks to issue mortgage loans at lower interest rates to millions of customers who normally would not have qualified for them (subprime mortgage; subprime lending), and the ensuing purchases greatly increased demand for new housing, pushing home prices ever higher. When interest rates finally began to climb in 2005, demand for housing, even among well-qualified borrowers, declined, causing home prices to fall. Partly because of the higher interest rates, most subprime borrowers, the great majority of whom held adjustable-rate mortgages (ARMs), could no longer afford their loan payments. Nor could they save themselves, as they formerly could, by borrowing against the increased value of their homes or by selling their homes at a profit. (Indeed, many borrowers, both prime and subprime, found themselves “underwater,” meaning that they owed more on their mortgage loans than their homes were worth.) As the number of foreclosures increased, banks ceased lending to subprime customers, which further reduced demand and prices.
The third significant impact is in 2022, mostly due to the Corona virus pandemic. I have written an article about this, please read it for more details.
So if we understand the impacts of the crisis, let's take a look at how a software engineer survived these times and the tips to survive some more in future.
There are primarily three main companies in the software sector - Product development, Services company & Corporates. Product development companies will always find ways to keep the resource pool because of the knowledge they gained on that product. If you fire a resource then as an organization they know how difficult it is to hire and train a new resource. Services companies are always at the mercy of the customers so look at the customer you are working with and take the next steps. Corporates will have budgets slashed so if you are a manager or above then you may be at risk because of the budget cuts. So chose the company wisely before switching or wait until the market bounces back and don't switch until then.
If you are a contractor, try to opt for a perm role as you can do it for the time-being and switch to your favorite contracting world once things look better.
Don’t try to leave the technical stuff you are doing. People who do tech stuff mostly survived during these tough times.
Try to do a bit more extra work by showcasing your technical and functional skills. Those who drive the work and people in a positive way will always go last.
Try to maintain a healthy relationship with the management, these are the times when the management can easily add you to the firing list if they want to.
Start saving money the time when the influencers and the news channels start talking about recession. Try to save as much money as possible as this will help during these tough times.
Unfortunately, if you lose the job, start applying for any kind of job and try to get into a job first. You can switch it once things settle down.
Don’t think that you are alone in this, there are millions who will lose their job. Start focusing on what can be done instead of worrying and I am sure you will find something suitable and even much better than what you were doing.
References : https://www.investopedia.com/financial-edge/0911/the-impact-of-september-11-on-business.aspx
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