In recent weeks and months, tens of thousands of employees of technology companiesespecially the bigger ones have been fired. This could lead one to think, therefore, that the majority of the people laid off work in positions related to technology. If so, tens of thousands of IT professionals with different specialties and levels of experience, coming from technological layoffs, would be available for other companies in need of attracting IT talent to hire them and end their problems of lack of trained personnel. in technology. But is it being so? Not necessarily.
Although layoffs in technology have affected hundreds of thousands of people in the last six or seven months, the reality is that most of these employees were in positions not directly related to IT jobs. According to Mbula Schoen, Gartner Analyst«Contrary to what we’re reading in many headlines, many of those affected by the layoffs were in business-related roles. More than in technical positions. In addition, there are increasing opportunities for IT jobs outside of traditional tech companies, so it’s important to look beyond the tech vendor community to get a sense of where the talent shortage stands.«.
In fact, Gartner has found that the 10 companies that have made the largest layoffs in IT talent now have 150,000 more employees than they did at the start of 2020. And when it comes to purely technology jobs, hiring they continue to outnumber layoffs by far. It should also be noted that although the layoffs have been numerous, in most cases they have not exceeded between 5% and 10% of the workforce.
The consultancy indicates that the demand for IT professionals will continue to significantly exceed the supply of professionals until at least 2026. Industry analysts, in fact, consider that the current layoffs are more a correction in the direction of the sector than an indication that the economy is heading towards larger rounds of layoffs.
In fact, for them, most of the layoffs in technology have been led by companies that are listed on the stock market and that, among other things, seek an increase in the price of their shares to satisfy their shareholders, who in many cases pressure them to cut their shares. templates.
Staff adjustments and reduction in non-IT areas, mostly
Thus, for example, Amazon’s workforce doubled between 2020 and 2022. But their revenues have only increased by 30%, which has led them to have to downsize their workforce and reduce costs in various areas. Fiona Mark, Forrester Research Analystpoints out in this regard that «Having to deal with adverse situations and oversized staff costs due to its rapid expansion in the last two years, many technology companies now need to adjust their costs in operations«.
From Gartner they also point out that, while the layoffs in technology have been described in many cases as an adjustment after a streak of overly optimistic hiring, the data shows that new hiring does not have to have been affected by them. In fact, according to Schoen, “the most recent layoffs have affected a broader range of workers, and companies and organizations are prioritizing key products and services to position their companies in a favorable position for the opportunities that the market can offer them«.
During the toughest time of the pandemic, companies had to switch in many cases to online sales and services. Digitization projects also skyrocketed, and in fact, many companies panicked because they did not have the specialized personnel they needed. Many began to hire moves because of that fear. Meanwhile, older workers began to retire as well, and those with IT experience left even more open positions to fill.
Many of the jobs that were filled at this time correspond to human resources, recruiting, marketing and sales personnel. And as the number of expert professionals in these sectors to hire decreased, companies even had to resort to outsourcing their services. Now it is precisely the employees in these areas who are suffering the bulk of layoffs, according to Gartner.
Some companies, like Amazon, are focusing on products that aren’t generating the revenue they thought. Like those related to Alexa. Others are making cuts in various departments. But in these cases, Mark points out that the reductions in staff in engineering positions are less than in the teams related to operations, marketing and human resources, and that “Tech companies still value engineering and technology talent as a system to create difference and growth«.
IT Professionals Still in Shortage: Job Supply Outstrips Demand
IT jobs therefore do not appear to be suffering as much as others from layoffs in tech. According to a LinkedIn report, in fact, most of the top 10 skills not considered social what companies are looking for to incorporate your staff, are the technology related. Workers with software development skills, which companies need to develop products and services, are most in demand.
There is also a high demand for professionals with data management skills. Thus, skills such as databases, and specifically SQL, are in high demand. In addition, there are no cuts in IT areas related to security, cybersecurity and analytics. In fact, there is a more than notable shortage of talent in them.
In many companies, CIOS, hiring managers and recruiters are in fact under increasing pressure to find talent in different areas of IT. Most companies are finding more competition than ever for hiring experts, and talent retention has become a priority for middle managers in many organizations.
For Gartner’s Schoen, CIOs need to place more emphasis on applying practices that can effectively attract top talent to fill positions they have openings quickly. For example, she points out that they should research their network of contacts and target a large number of passive candidates.
Schoen points out that many IT talent hiring plans are designed to target active rather than passive job seekers, missing a great opportunity to increase both the quality and quantity of IT-savvy candidates. They should also target laid-off employees in areas of IT that can be specifically tailored to what they need with just some specialized training. For example, in the case of data scientists, of which there is a shortage, it would suffice to properly train data and business analysts with more technical skills.
They can also find staff at companies that have made layoffs but haven’t touched much on technology-related areas. The employees who have remained in it may see the companies as less stable, and move more easily to others that have not laid off staff. For them, they will be more stable at this time.
In general, according to Schoen, “companies that do not meet the expectations that their employees have may lead to employees entering their templates, who will leave them in a short time and as soon as they find a position that is more satisfying to them. Focusing on factors other than salary that employees care about, such as flexibility and growth opportunities, can improve an organization’s options for IT to win the current and future competition for talent.«.
