Many tech jobs shifted to remote work, and new roles were established to adapt our stay-at-home lifestyle. As we transition into this post pandemic period of slowly opening the world back up – tech companies are evaluating their workforce needs and finding themselves overstaffed and needing to make hefty cuts. The pandemic also caused a huge increase in the use of automation technologies, which has led to even more job losses in the tech sector.
The largest factor however has to be the rising interest rates and the unstable political climate that has investors in both private and public markets changing how they value tech companies. They are focused less on the high growth which we saw at the beginning of 2020 and are more concerned with strong cash flow. This is forcing companies to concentrate on their profitability rather than their growth potential.
The short-term outlook for the tech jobs might not be great but the market is nowhere near collapsing. In fact, the U.S. Department of Labor reported the economy added 428,000 new jobs last week, beating the Dow Jones estimate of around 400,000. The days of rapid growth may be on-hold while companies worry more about short-term profitability and there may indeed be more layoffs as companies try to adjust to the new reality.
The industry will continue to grow as always but at a more measured pace and companies will need to be adjust their methodology to avoid these periods of stagnation going forward.