The end of 2022 was black for technology employment. A wave of layoffs began, destroying more than 150,000 jobs. The problem is that 2023 is off to a much worse start: January broke all records for job losses, with another 88,000 layoffs in a single month. Almost a quarter of a million people have lost their jobs in just a few months, and the question now is how and how long it will take for such a large number of people to fully return to the labor market.
Sources interviewed explain that there is a short and a long answer. The downside is that their prospects are much better than most workers. “We do not think that these professionals will have much difficulty in finding a new job. Obviously, it will depend on the type of function to be covered and the casuistry of the companies that require this digital talent and the job expectations of these people, but there is work, it is a sector that does not have talent,” says Monica Perez. , Director of Research at Infojobs.
According to the specialized portal Layoffs.fyi, which collects data on layoffs in the technology sector after the pandemic, the destruction of jobs reached 246,650 jobs from 2022 to the first weeks of 2023. All digital giants except Apple shed at least 10,000 jobs (Amazon, 18,000, almost all in technical positions; Google, 12,000; Meta, 11,000; and Microsoft, 10,000), a cost-cutting policy that has moved almost all companies. in their respective business fields.
Exiting non-tech companies and reducing labor benefits
Mass layoffs at technology companies represent a great opportunity for non-specialist companies to access highly skilled and specialized professionals, according to various consulting sources. Digitization means that practically any type of company may need workers of this profile, and the employment crisis in the technological giants will make it easier for the labor market to have people with high specialization and experience until now almost entirely by this big one. multinational companies.
“The vast majority of companies in our labor market are small and medium-sized companies, and so far it has been difficult for them to hire a profile with these characteristics. Maybe this will open up a new opportunity,” says Varela. Conversely, this exit to other sectors may also mean that workers lose the good working conditions they enjoyed in their previous jobs. “They will probably have to lower the terms,” he admits.
“The laws of supply and demand will be the ones that set the tone. If there is no demand for this work from startups and small and medium-sized businesses, the tendency will be to lower wages, provide fewer social benefits and undermine flexibility (for example, offer less remote work),” adds the head of UGT.
“Yes, it’s likely that a good number of these professionals will have to cut some terms,” agrees Infojobs: “The spiraling wage growth that has led to a ‘battle’ for tech talent in recent years is well-known, and so on the other hand, the sector’s pay packages tend to include Many additional benefits that are not as common in other industries.”
Many were fired, but more were hired
Layoffs in tech giants are around 5% or 6% at Microsoft or Google, go through Meta’s 13%, before reaching 50% at smaller companies like Twitter, where the Elon Musk phenomenon must also be taken into account. However, during the pandemic, tech companies expanded their workforces far more than they are currently shrinking. For example, from 2021 to 2022, Microsoft increased the number of employees by 22%, Amazon by 62% and Meta by 30%.
The rationale for all of them making these layoffs is that their expected growth has not consolidated. “The release appears to be more of an adjustment of business plans (caused by over-contracting prospects that did not take into account the current scenario of uncertainty and slowdown) than the general state of the companies and institutions that are currently betting.” Digital transformation. And that’s how the heads of big companies justified it,” says Peres, from Infojobs.
The panorama that left in 2022 was very different from what was expected
“In recent years, the growth of these companies has not stopped, and the pandemic has led to a radical shift in digital consumption and purchasing habits, multiplying activity in the sector in record time, especially in leisure, entertainment and e-commerce. However, the panorama that 2022 left was very different from what was expected: the war in Ukraine caused an energy crisis and exacerbated supply shortages, resulting in inflation… The scenario of uncertainty really slowed down the economy. And development is planned,” he adds.
Despite the layoffs, in most cases the labor force is still larger than it was at the start of 2021. In addition to this, some have announced that they will continue to hire for some key positions, e.g. As in related to artificial intelligence.
The future outlook in Spain remains good
“There is still a great demand for workers in the labor market technology. In fact, there are reports suggesting that there are more than 120,000 vacancies to be filled in technology and new professions in Spain alone,” they note from Adigital, the employer association of technology companies. “While timely adjustments have been made, given the current economic context, the general trend for technology companies to continue to hire,” the spokesperson explained.
Spain has significant strengths to continue its progress in 2023 as an area that creates and attracts employment
Digital Technology Recruiter
“Spain has important strengths to continue its progress in 2023 as an area that creates and attracts employment,” they continue from the association, to which more than 500 companies belong. “By the way, thanks to its quality of life and attractive investor, which, together with regulatory frameworks such as the recently approved startup law, new regulations for professional training or the national plan for digital skills, gives Spain the potential for consolidation.” hub of digital talent,” they break down.
Source: El Diario