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Amid tech layoffs, what happens with contracted workers?


You've probably seen the headlines about the massive layoffs in tech. More than 100,000 employees were let go in January of 2023 alone, that according to the website. TrueUp. That's on top of the more than 140,000 tech employees who lost their jobs last year. Now, getting laid off is traumatic for most people, but it might be particularly frightening for foreign workers whose right to stay in the U.S. is connected to their jobs, like people on H-1B visas. We'll say more about that in a minute.

But first, we want to focus on people whose job status might not even be counted in the numbers we just cited. We're talking about contract workers. At Google, for example, The New York Times reported that - pre-pandemic, anyway - Google's army of temps and contractors actually outnumbered its full-time employees. So we wondered, what is happening to those workers now that massive layoffs of-full time employees is taking place? We called Catherine Bracy for that because she's been advocating for contract workers in tech for years as the CEO of TechEquity Collaborative. That's a nonprofit concerned with eliminating inequity in the tech industry. And she's with us now. Ms. Bracy, thanks so much for joining us.

CATHERINE BRACY: Thanks for having me.

MARTIN: So it's my understanding that when tech companies announce layoffs, they don't include the number of contract workers who have been let go. Is that accurate?

BRACY: That's correct because these workers aren't technically or legally employed by the tech companies.

MARTIN: So is there any way to know how many contract workers these companies are terminating or have terminated or even how many they're employing in the first place?

BRACY: No, there isn't, though we have a few clues. Twitter announced when they did their first round of layoffs that 4,400 of their 5,500 contract and temp workers had been let go. Their contracts had been ended, in addition to the 3,500 full-time employees who were laid off in that first round of layoffs. But there is no data across the industry as a whole, in part because these workers are really off the radar. We actually just worked on the first bill in the country that passed in California last year that requires companies and staffing agencies to report to the state how many workers they have that are on these temporary contracts, which will give us the first picture ever of who these workers are.

MARTIN: But that's only for California companies?

BRACY: That's right.

MARTIN: Do you have any sense of, based on whatever data you have, like, what the big picture is with tech companies and their contract workers and what the trends have been in recent years?

BRACY: We did a survey last year, which we think is the most comprehensive survey of temp and contract workers in the tech industry. And based on what we heard, they are paid about 75% of what the full-time employees are paid for doing the same job. They're also on very precarious, short-term contracts that get renewed at the whim of the employer. And they have really no voice on the job. Their workplace is very fragmented. Their legal employer is not the company where they actually go to work every day.

And this causes a lot of harms to the worker, not least when there is a layoff. They really just get the rug pulled out from under them with no protections. Many of the workers that we talked to that got laid off from Twitter were not even paid for their last few days of work, let alone did they get a severance package. So really, this is a precarious part of the workforce, and it tells a more nuanced story about who a tech worker is than, I think, that - the story we've been fed for the last 10 years or so.

MARTIN: Well, to that end, I think a lot of people hearing this would be very surprised by this because I think this is shocking.

BRACY: Yeah. I mean, tech has really built a reputation as being an envious employer, right? The great jobs with great perks and high salaries. But the truth is these companies employ a vast number of workers who are not directly employed legally by the companies but who the companies depend on to do critical work - some functions that are, I think we would all agree, critical to the work that tech companies do, like, for example, content moderation at Facebook that are fully outsourced.

And all of those workers are temps and contractors. There are, you know, recruiters and marketing professionals. And it is, in large part, a cost-saving measure, but not just because it's cheaper to hire workers through contract agencies. It's also because when a company reports back to its shareholders, they're able to get a, you know, better share price when they can say that they're doing more with a lower headcount.

MARTIN: So if you're a contract worker laid off, are there any job protections at all, or is it generally understood that if you're hired through one of these third-party vendors, there's no provision for you if you get laid off like that?

BRACY: That's right. There is a law in California. There's - there is a federal law called the WARN Act, and then states sort of enact their own protections that may be stronger than that. And California's requires large employers that are doing mass layoffs to provide 60 days' warning, which often comes in the form of a 60-day severance package. But the workers that are hired through staffing agencies are exempted from that.

MARTIN: So the question I have is, do you think these layoffs are real? Is the intention here to lay people off, then to rehire them as contractors?

BRACY: A lot of these companies aren't in a business position where they actually have to lay workers off. They're doing it to send a signal to the market, but they're not trimming their operations, like, to the extent that they're shutting down certain parts of the business. So somebody's got to do that work. And I would be surprised if they weren't trying to figure out a way over the next year to hire some of this capacity back through staffing agencies.

MARTIN: And before we let you go, I don't know if you feel comfortable, you know, offering this, but you're an advocate, you know. If a worker came to you and said, look, you know, I have a skill set, and one of these temp agencies has come to me, and I want to work, what do you tell them? Do you suggest that people take these jobs?

BRACY: I would tell them to go in eyes wide open. Many of these workers go into these jobs with an expectation that is created for them by the hiring companies that this is a pathway to a lucrative and stable career in tech. And the truth is that many, many - vast majority of those workers do not get converted to full-time roles. But we are not saying that all of these workers should be hired as full-time employees of the companies. We just think that there needs to be a much stricter set of protocols around how these workers are treated that creates a floor that really does offer temp jobs to be a stepping stone to a better career. Right now, they're not.

MARTIN: Catherine Bracy is the founder and the CEO of the TechEquity Collaborative. Ms. Bracy, thanks so much for joining us.

BRACY: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.