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In the world of big tech, there have been several hiring freezes and recent layoffs. Many worry that layoffs in this range signal an impending national economic crisis. Still, there is hope for tech workers and jobs outside the traditional tech giants. Companies outside of big tech are courting tech talent to grow their tech infrastructure.
Overall, don’t expect a slowdown in Information Technology (IT). What you should expect is redistribution.
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IT hiring is a drop in the bucket amid current layoffs and global shortage of “cooling off” IT talent
The three major jobs in the ICT industry are a software developer or engineer, a user support specialist, and a systems analyst. Other positions include project manager, systems engineer, system administrator, and network engineer. High-profile tech layoffs and hiring freezes are masking sustained job growth and demand in the job market. Many companies outside of the tech sector are hiring technical staff for their digital transformation processes. As a result, growth rates are minimally affected outside of large tech firms.
Some tech firms’ layoffs, such as those at Stripe and Meta, result from over-hiring. This happened in 2020 as part of the tech boom that emerged during the COVID pandemic and has little to do with the state of our economy. Raising capital is becoming increasingly difficult as the public market valuations of these tech firms continue to decline. Hence, they are switching from hyper-growth mode to efficient growth mode.
Globally, there has been a shortage of technical workers for some time. Management consulting firm Korn Ferry predicts that we will be short of 85 million tech workers globally by 2030. That’s $8.5 trillion in lost annual revenue. As technology is increasingly becoming a fundamental element of every operation within any company, there will always be a shortage of highly skilled technical workers, no matter how much companies hire and pay more.
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The fundamental demand for IT is increasing
There is much work around the world to build new digital products, rebuild old systems, leverage cloud technology, and automate human-dependent processes.
Tech job postings are up 25% this year as aerospace, finance and healthcare companies race to hire tech talent. And since 2020, tech talent from around the world is finding work in Canada, especially in Toronto and Vancouver. One reason for this may be the complicated immigration policy of the Trump administration. Why jump through hoops to work in the US when guidelines are lax and work is available in neighboring Canada?
Canada’s tech job growth rate is outpacing that of the United States. This continues even as the tech giants have hired vast numbers of workers in cities such as Seattle and San Francisco.
Layoffs and freezes will impact different sectors unevenly
While big tech firms will slow down, other industries (eg, travel and healthcare) will reap the benefits, meaning more resources will come in.
Each laid-off tech worker has a job waiting in the United States or elsewhere. Remote work, on the rise since 2020, has expanded the job market and made it possible for people to work anywhere.
Frankly, Some Bloodshed Is Healthy
Compensation and perks have reached insane levels in big tech and Silicon Valley. Many believe that the valley is losing its unique aura. Silicon Valley talent may not be a good fit for “Main Street” and may have little interest in working in such an environment. They have to be accommodated, thereby creating a healthy, adaptable and sustainable technical workforce in the long run. Silicon Valley and New York City, the traditional major tech hubs, are cooling off and cutting costs. However, states such as Pennsylvania, Arizona, Texas, and Florida are seeing tech industry job growth.
It’s also important to keep in mind the Eastern European IT picture. What is happening now is that Eastern Europe, traditionally considered the main rival, is in turmoil because of the war in Ukraine. Although still working and available, Russia and Belarus are no longer in the picture, and Ukraine is a high risk. Poland, Romania, Serbia and Portugal are becoming more expensive due to wars and a tighter talent market. This is helping India, always a big IT outsourcing hub, profit.
The situation on the labor market is only getting better. Tech is the backbone of every company, whether consulting, healthcare or aerospace. Displaced large tech workers will move to companies in other sectors where they will still be paid well and expected to do similar work. IT jobs were hot and still are because of the law of supply and demand.
Every company wants to hire the best tech talent. However, there’s only so much talent to choose from. It can get very competitive when another company can lure away the technical staff that one company has its eyes on. Let the tech talent wars continue.