Whether we are approaching recession or not really, the slowdown of the tech market is a fact. Does it mean the developers should start worrying about their careers? Check our deep dive on tech layoffs in 2023, which the industry is already talking about.
After a few years of intense growth, the tech industry is slowing down. This phenomenon is a part of a major trend, seen across various sectors, and caused by global market stagnation. Our economy, already affected by the pandemic, has changed radically with the Russian aggression on Ukraine. Inflation has increased significantly, and with it – the costs of life, real estate prices, and interest rates.
All these variables combined had to influence various sectors, particularly those which until now have been continuously growing, like IT. Does it mean IT professionals should worry about their future? We would not say so. We break down the current circumstances so that you can understand their background better and what they mean for tech.
Tech Layoffs in 2023 – the Background
In such a hostile economic landscape, we are less eager to spend and invest, which may lead to a recession in the worst case. Some claim we are already experiencing it (however, American GDP has raised again in the last quarter, so it may be debatable). This sentiment does not help tech companies that sometimes indeed provide essential services but, in most cases, support innovation, which is not a priority expense.
This business landscape is paired with the excess of new talents in the IT industry. The pandemic has triggered the Great Resignation trend. Many people would leave the jobs they were not satisfied with and search for new positions or change their career paths for more profitable. IT is known for paying well, so it became one of the most popular choices. That has resulted in a flood of juniors in the IT market, which made it much harder to enter this industry than in the past.
At the same time, inflation has lifted the salary expectations of the teams, challenging the tech companies’ budgets. To be capable of meeting them, they are forced to cut expenses in other fields. All these factors combined are at the core of the tech industry slowdown. Now, let’s talk about what it means to you as an IT professional – aspiring or well-established.
IT Jobs in 2023 – who should Worry about the Layoffs?
We would say, as a developer, you are not at risk of losing a job in 2023, considering that the demand for professionals in this sector still remains high. The most affected by the tech slowdown will be actually those who haven’t entered the industry yet but were hoping to manage in the nearest future. The swollen talent pool is rising the entry threshold, and facing the recession, most tech companies are limiting the budget for training programs and reducing the number of offered IT job opportunities.
Note, however, that it’s not a rule for all niches. For instance, if you take a look at blockchain development services, you will notice that software houses specializing in it are continuing to grow and recruit professionals all the time. Regardless of the possibility of a recession, we are currently experiencing significant changes that call for technological innovation (AI, web 3.0, cryptocurrencies, NFTs, rapid development of e-commerce)
The positions of specialists with experience and expertise in machine learning, deep learning, and other artificial intelligence solutions like IoT will also remain safe. What may happen is that the tech companies will reduce their training budget and hire fewer people – but the “big reset” scenario is rather exaggerated.
