I had a little software dev company which sold software components; I made a little website which detailed the components (think of things like news, forum, chat, calendar, contacts, etcetc) and put that online in 1999 (I was writing desktop software and cgi e-commerce for many years by then). I got phone calls (email was on their too but...) very fast which resulted in a large investmenr and a fusion between my small company and one of the more successful web companies in the region (they had a fax machine (yup...) spouting out RFPs all day) but could not deliver as they built everything from scratch; components sped up their work a lot. It also resulted in clients around the world so my bargaining position in that fusion was solid. Ofcourse
most clients were startups with investment money, hardly any or incapable people and no real plan. Visiting clients was usually more of a party; limos, booze and food all day, hardly any work. One of our largest clients at the time had everyone partying 3 days and then we did ‘some work’.

As devs we had a really easy compared to now; expectations were low and getting anything working was enough to satisfy their investors. We knocked out things fast with a small team but a large difference before and after at that time was that before actually no-one tested or even looked at everything; they were happy spending the money. Salaries for devs were high and we were rockstars no matter the quality or performance.

When the crash came, most projects for startups instantly halted. Sometimes literally from 1 day to another we got letters from lawyers that their clients were filing for bankruptcy. Meaning a lot of ongoing work was unpaid (not a lot; our CEO did not tolerate late payment, but payment comes after the work, per month, so their were gaps).

The owner of our office (we had 2 floors, they had the rest) went bankrupt a few weeks in so we had to move. All offices around us became empty over the next weeks to months; almost every building was for hire the next year.

I had a lot of dev friends who lost their jobs at startups overnight and who all (I cannot think of any who did not) moved to big corps (not necessarily tech) and have not moved since.

We luckily, because of the worldwide components sales, had attracted some large clients (insurers, banks, unions, political parties) so we were not hit so hard; we had one of our best years 1 year after. We now had the opportunity to pick up very good devs and we did.

The fallout was that we did not acquire new clients for a few years and lived on the current clients (risky but better than the alternative of no clients).

Another thing we really noticed was that people after were really counting money and so they started to really push for performance and quality which put strain on us devs until we figured out how to cope with that (we never had to before).

A lot of devs I know could not find jobs until a couple of years later; companies hired way too many people. The big consultancy outfits at the end of the 90s started hiring and training non-stem grads as devs for instance. They hired whoever wanted to program to satisfy demand; the layoffs were massive. After the crash they noticed they did better work with vastly less people as well; the low focus on quality before the crash made many people kind of perform minimally.

There is some economic downturn coming soonish which always has consequences for jobs etc, but I cannot see it going the same way as it did then. Devs are already ‘applied optimally’ (worked to death) in many places so after the crash they cannot work harder as we were forced to then (financials went down, quality demands went up) but I do think, now that so many people are devs and companies are hiring whatever they can get, globally, that will cause a massive amount of layoffs and probably lower salaries for a while. Good, all round devs with communication skills won’t have issues, nor will talented beginners, but a lot of others will probably be axed.

The 2001 crash did do little in the long run; companies are still invested stupid amounts (far larger than at the time) into for bad/infeasible ideas and companies are again hiring whoever and training them. So mid to longterm (5 years) there is nothing to fear, short-term, depending on what and where you work and how good (and lucky etc) you are, you might get a few years off.

I found though that right after both crashes (2001,2008), it was a good time to create a startup; resources are cheap (people, offices, 2nd hand hardware (we bought a lot of servers and laptops of bankruptcy auctions for next to nothing) etc) so there is silver lining no matter what happens. Make sure to save money though.

The biggest issues were with friends who recently picked up ‘html programming’ and who worked in a (bad) startup and recently had a (too high; money was forever in the boom!) mortgage and kids right before the crash and suddenly everything collapsed. Luckily in my country you won’t die, but they usually had to sell.