How the Global Economy Hits the Tech Industry
Interest rate hikes, exchange rate swings, and how they actually affect developer hiring and salaries
The Day an Entire Team Disappeared
March 2023. I came to work and the team next to us had empty desks. A 12-person team was now 5. Layoffs. They'd been working on a new business initiative, and when the investment round fell through, the cuts came immediately.
At the time I thought "tough luck." But it turns out this was a direct consequence of global interest rate hikes. When the US federal funds rate goes up, venture investment shrinks. When investment shrinks, startup initiatives get cut. When initiatives get cut, people get fired. I first understood this chain of causation that day.
Why Rising Interest Rates Hurt Tech
The mechanism: when the base rate rises, bond yields go up. Safe investments start paying decent returns, so there's less reason to put money into risky bets like venture capital. When rates were near zero in 2021, startup valuations were absurdly inflated because capital had nowhere else to go.
As rates climbed sharply in 2022-2023, that bubble deflated. The wave of mass layoffs at US tech companies all happened around the same time. Google 12,000, Meta 11,000, Amazon 18,000. Korea wasn't immune either, with Krafton, Nexon, and Kakao all reducing headcount.
How Exchange Rates Affect Developer Salaries
Here's an unexpected one. When the Korean won weakens against the dollar, Korean developers working for overseas companies see their real income go up. But for Korean companies, foreign SaaS costs rise, squeezing IT budgets.
When the exchange rate hit 1,380 won per dollar in 2024, our company's AWS bill jumped 12% year-over-year. Same usage, purely exchange rate impact. That triggered a "cloud cost reduction task force," and 2 people got pulled from the dev team. (I was one of them. Spent 2 weeks doing nothing but downsizing EC2 instances.)
Where the Market Is Now
As of late 2025, the US has started cutting rates and Korea is following. Theoretically, venture investment should be reviving. But it doesn't feel like 2021 levels yet. Job postings are increasing, but it's not "juniors getting $60K offers" territory anymore.
What's interesting is that AI positions are the exception. AI engineer and ML engineer hiring keeps growing regardless of economic cycles. This feels like a structural shift, not a cyclical one.
Why Developers Should Read Economic News
I used to not care about economic news. "I just need to write good code." Then I watched the team next to me vanish, and my thinking changed. My salary, my job security, are influenced by central bank decisions on the other side of the planet.
Now I check the Bank of Korea's base rate decisions, the US FOMC schedule, and the won-dollar exchange rate every Monday. Knowing this won't prevent layoffs, but at least I understand why things happen. And understanding enables preparation. Building a thicker emergency fund, expanding skills toward where the market is heading. It's a late realization, but better late than never.