In the first half of 2023, numerous tech giants announced their massive layoffs according to the financial effect. From big technology companies such as Amazon, and Microsoft, to small tech enterprises and startups in Fintech and SaaS, the total number of eliminated jobs from January to July 2023 is 224,503 (according to techcrunch.com). The layoff speed has slowed down. In July, there were almost 10,000 employees laid off, in comparison to nearly 100,000 in January.
Let's delve into this article to know more about what’s really going on in the Tech industry, and what’s is the future recruitment trends in this specific market.
The reason behind layoffs
Undoubtedly, firms use layoffs as a strategy to lower operating costs as a result of financial difficulties. But is that the only cause? These costs shouldn't even be there, according to Brandon Southern, the former chief of analytics at Amazon, eBay Inc., and GameStop Corp. Brandon believes that managers are frequently to blame for layoffs since they expand the staff to boost their chances of promotion. More of Brandon's ideas can be found in his Insider posts.
How do tech giants' layoffs affect the tech job market?
Layoffs from big companies not only affect the internal environment but also have an impact on the tech labor market as a whole.
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For laid-off employees: More competitive job hunt - job seekers are now having more pressure as they must compete with a much greater quantity of candidates who are open to jobs at the same time.
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For the job market: Companies can now access a large, qualified pool of talent, as the number of laid-off employees is increasing.
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For remaining employees: The increase in workload can lead to burnout, stress, and overwork for those who stay.
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For the company: Losing up to 70% of the workforce is no doubt a big problem for the company, it affects the company’s ability to innovate and adapt to technological changes and faces a risk of rising new competitors. Furthermore, the firm may face the risk of investors doubting its profitability.
Is the Tech industry “insecure” due to massive layoffs?
It appears that the tech sector is still one of the top earning and in-demand despite the significant number of job losses this year. According to professionals, more than 75 percent of dismissed employees have found new employment within 3 months.
So, is the Tech industry insecure? Apparently, yes. Is it hard to find a job in this sector? It depends on the position and years of experience. For instance, the labor market is still very tight in key function areas like data science, software engineering, and cybersecurity. For those who want to find their way back to a tech career, they can easily apply, getting interviews and offers almost immediately.
“The recent pullback represents a small fraction of the massive tech workforce. The long-term outlook remains unchanged with demand for tech talent powering employment gains across economies” - Tim Herbert, chief research officer at CompTIA, said as the U.S. Bureau of Labor Statistics report for February was released.
The Tech market will remain resilient in 2023
Despite facing a recession in 2023, the technology industry is more likely to surpass the storm and continue to play its leading role in the labor market. One of the main reasons is that technology is so important to our everyday lives, both personally and professionally. The Internet of Things (IoT), virtual and augmented reality (VR/AR), artificial intelligence (AI), blockchain, and big data are expected to continue the growing technology trends. Furthermore, businesses are more inclined to carry out digitalization strategies to keep one step ahead of rivals.
Reasons have shown that employees in the tech industry remain in high demand and are more likely to develop in the future. Here are some positions that are forecasted to remain top jobs in the tech industry, according to CompTIA’s Stage of the Tech Workforce report:
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Data Scientists and Data Analysts.
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Cybersecurity Analysts and Engineers.
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Web Designers and UI/UX.
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Software Developers and engineers.
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Software QA and testers.
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CIOs and IT directors.
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Systems analysts and engineers.
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IT support specialists.
What are the recruitment trends in the Tech industry lately?
After massive layoffs in 2022 and 2023, the recruitment trends in the Tech industry have met some significant changes.
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Promoting internal candidates: instead of hiring an external candidate and spending the next 6 months to train and for that candidate to be functional in that role, enterprises can spend that time and effort to train an internal employee who has already known the organization well.
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Diversity, equity, and inclusion: workplace diversity is more and more important these days, as employers are now open to recruiting talents with different genders, nationalities, education, and beliefs.
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Demand for flexibility: reports find that the shelf life of emerging technology is down to 2.5 years and will tend to be shortened in the future. Investing in a specialist with a whole skill set will be too expensive and unnecessary in the next few years.
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The 4-day work week: recent reports show that more companies are fostering the 4-day week arrangement to attract and retain talents.
Wrap up
Big Tech corporations' layoffs impact the tech industry both negatively and positively. Tech workers and tech occupations can face greater challenges after being laid off. However, the tech industry is more likely to surpass the storm as it has become extremely important in our daily lives.
