With the economy in a seemingly perpetual state of turmoil and more talent competing for a dwindling number of roles, redundancy can feel as if it’s always just around the corner. Indeed, tech sector layoffs in 2023 surpassed the whole of 2022 in just the first four months of the year – and that was after an increase in layoffs of 649%!
Layoffs are a harsh reality of the sector and will continue to blight it for the foreseeable future. But how did we get here and why are things so complicated right now?
Tech layoffs are often a response to various market conditions that affect the industry. If you want to understand the market and its impact on layoffs (and be best equipped to respond to them), there are several dynamics at play which must be addressed.
As we face a current economic downturn, it’s easy to see the ramifications such an event could have on a tech company, particularly one that employs thousands of people across hundreds of divisions. In times of economic strife where consumers are spending and investing less, revenues typically experience a knock. In response, some tech companies may resort to layoffs to cut costs and maintain financial viability. Even the major players are not immune, with Google, arguably the biggest name in tech, recently culling 12,000 jobs from its workforce.
The tech industry is known for its cyclical nature with periods of rapid growth often followed by corrections, leading to layoffs as companies realign their resources and find their bearings. All major technological advancements bring with them significant changes too, as some roles are rendered obsolete while others become more vital. This inevitably leads to layoffs and periods of instability.
Unforeseen events like the COVID-19 pandemic or the war in Ukraine can disrupt supply chains and consumer behaviour, severely affecting tech companies' operations and potentially leading to layoffs. These events can’t be planned for, in many cases, but it’s important to be aware of major global events and start preparing for the worst if and when they happen.
The pandemic brought about a sudden shift in work patterns, with many companies transitioning to remote or hybrid work models. Given the mostly digital nature of much tech work, the industry was an obvious fit for remote work and managed to pivot to the new normal more effectively than most.
With everyone working from home, the pandemic also saw some tech businesses experiencing a dramatic surge in demand, leading to over-hiring. As the pandemic stabilised, some of these hires became redundant, resulting in layoffs.
It could now also be argued that we’re moving away from the peak of the remote work boom, with LinkedIn data suggesting remote positions fell in 2023 to 14% from a high of 20% during the height of the pandemic. This could mean remote roles are being scaled back. As a result, those working from home could find their jobs culled or have to adapt to in-house or hybrid model.
The integration of artificial intelligence (AI) in various tech processes has led to increased efficiency, but it’s also led to a major existential panic for millions of tech workers. While the advancement of AI is generally seen as a positive thing for the industry, it has also resulted in job redundancies, particularly in routine and repetitive tasks that can be automated.
Generative AI has been around for a while now, of course, but it’s only recently that platforms like ChatGPT and Midjourney have brought the concept into the mainstream. And once the toothpaste is out of the tube there’s no force in the world strong enough to put it back in.
AI has already been linked to thousands of layoffs in the industry that spawned it. IBM admitted to pausing hiring for roles earlier this year while it reassesses the role AI could play in its workforce. File-storage service, Dropbox, cut 16% of its staff as a direct result of AI. In the coming years, it’s (unfortunately) only going to get worse and while there will be opportunities to retrain and AI will create almost as many jobs as it takes, it’s going to be a while before the market readjusts.
Despite the gloomy picture painted above, there are still reasons to stay positive.
Job cuts in the tech industry are not inevitable. While some companies may be reducing their workforce, others are actively hiring to meet the demands of a changing tech landscape.
Many tech companies are still actively recruiting, especially in areas like cybersecurity, cloud computing and data science. Opportunities are therefore plentiful for those with the right skills.
If you’ve recently been laid off, use this free time as an opportunity to upskill and expand your skill set. The tech industry is continually evolving and staying ahead of the curve can make you a more attractive candidate. At the very least it will look good on your CV.
At hackajob, we’ve got an upskill feature that allows you to learn new skills with different programming languages and more. T
We've compiled some frequently asked questions to address the most pressing concerns during a potentially challenging time.
Yes, many tech companies are actively hiring for various roles.
On hackajob, we’ve got a number of live roles, as we work with our companies to find the best candidates for the roles. Look at our live roles here and if you’d like to be matched to a company, click here to sign up to hackajob.
Explore job boards and company websites to discover tech companies that are currently recruiting.
Assess your skills, update your resume, network and consider upskilling to enhance your job prospects.
Look for opportunities to diversify your skillset and explore roles that align with your experience and interests.
Ready to take the next step in your tech career? Visit our job listings to explore the latest opportunities in the tech industry.
At hackajob, we're committed to helping tech find their next dream job. Remember, you're not alone in this journey. With the right support and resources, you can turn redundancy into a stepping stone toward a brighter future.
If you’re ready to take the next step, contact us today to learn more about how we use AI to match the perfect role to the perfect candidate, every time.