Tech layoffs: Is the war for talent over?

16th February 2023
Kiera Sowery

Tech layoffs from major firms have disrupted the tech industry throughout 2022 and into 2023, making the hiring boom of 2021 feel like a lifetime ago.

Just this month, Zoom, who experience a pandemic growth spurt has laid off 15% of its workforce, Dell Technologies is set to lay off 6,650 staff, and PayPal will cut 2,000 jobs.

This comes after tech giants Microsoft, Google, Amazon and Twitter announced massive layoffs. It’s not just bigger tech companies being affected. Startups and SMEs have also felt the need to lay off some of their staff.

So, is the tech war for talent over? where do layoffs leave tech workers looking for new roles or contemplating change?

The problem is made up of both external and internal issues, including inflation, interest rates, supply chain issues, and pandemic hiring sprees.

However, it’s not all bad news. The big tech workforce layoffs and hiring freezes could provide a host of other industries with the top talent they’ve coveted for years.

Traditional firms that previously struggled to attract and or retain tech talent now have access to some of the best talent globally.

Organisations including schools, hospitals and government offices rely on tech professionals to elevate concern, and these mass layoffs have created an incredible opportunity for companies. Companies can swoop in and offer career lifelines to dismissed tech workers.

Traditional firms can use the recent layoffs as an opportunity to pursue employees with the following skills, including DevOps, Cloud, AI, cybersecurity and privacy, automation and data management.

This new talent can then transform perhaps stagnant business models to prepare for ever increasing turbulent business environments.

The war for tech talent is certainly not over and won’t be for as long as the world utilises technology in most aspects of daily life. Many tech roles, including computer programmers and system analysts remain in demand. With salaries rising to six digits.

Ambroży Rybicki, CEO of ARP Ideas offers his insight into the impact of tech cuts, and how outsourcing specialist teams will become a growing practice as big tech firms weather the difficulties of 2023: In recent weeks, Big Tech has suffered Big cuts, as several silicon valley companies reduced their workforce to streamline their business operations in the face of a looming recession and an uncertain economic climate.

“But reducing headcounts will not only have a human impact on redundant staff, but also on the services and operations of major technology companies.

“The technology sector is already facing a huge digital skills gap, with nearly 12 million workers lacking essential digital skills, and the recent cuts will only exacerbate the already difficult resourcing issues. 

“While tightening budgets, restructuring and halting recruitment are understandable approaches to take during unfavorable market conditions, they will impact larger business objectives, potentially stifle growth and could lead to overworked staff who are under pressure to meet targets despite reduced resources, people and necessary skills.”

So, how can technology companies combat these challenges, and weather the storm?

One recommendation by Rybicki is that resourcing and specialist skills gap issue lies in outsourcing.

“That is engaging with external, third-party service providers who are able to provide the necessary services at a fraction of the cost in comparison to employing in-house. For instance, providers such as ARP Ideas, can provide a diverse team of specialists depending on the needs of the project, from analysts and programmers to software architects and technical consultants.

Outsourcing will become an ever-growing trend in 2023, as technology companies making cuts look to fill critical skills gaps and meet business targets on tighter budgets. By outsourcing teams,  businesses can rely on the expertise of specialists, without the need to invest in costly, extensive and often time-consuming training for employees.

“Ultimately, outsourcing offers companies greater cost-efficiency and flexibility, with the ability to quickly scale-up the amount of resources dedicated to particular IT services that might warrant attention, and scale-back accordingly. As the recession continues to tighten its grip on the economy, we will see more and more businesses, including in the tech sector, turn to outsourcing over in-house hires.”

With more than 23,000 employees at more than 80 global tech companies laid off in January alone, and 17,400 so far in February, mass job cuts are set to continue. It is worth noting the opportunity that has been created for traditional companies who can gain access to a new market of talent in a less competitive market. One thing we know for certain is the uncertainty of the tech industry.

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