Just as Schrodinger’s cat was famously both alive and dead, tech layoffs have been making headlines all year – but tech companies are hiring too.
By one estimate more than 41,000 tech workers have been laid off in the US this year alone, including at high-profile companies such as Netflix, Snap and Robinhood.
Europe has not been immune, with news that stalwarts such as Swedish fintech Klarna is to shed more than 10% of its staff.
So if you’re in the tech sector, is it smarter to stay where you are, or is now the time to make a smart move?
What’s it all about?
The current round of job losses is driven by a number of factors but basically all the warning lights on Europe’s economic dashboard are flashing.
The war in Ukraine, the energy crisis, inflation, rising interest rates and pandemic-related supply chain snarl-ups are all causing a drag on the economic outlook. Winter is coming and so, it would appear, is recession.
Sectors that depend on consumer spending always feel the chill winds first, as people simply stop buying. So if your tech job depends on discretionary income, it may be time to start honing your CV.
Tech is recession proof. Not.
If you thought the tech sector was immune to recessions, you’d be wrong. It’s just that it hasn’t had much experience of one lately. The sector has been going gangbusters for two decades and sailed through the global financial crisis.
The reason we’re seeing a flurry of activity now however is because so much of the sector is made up of start-ups and so many of these depend on venture capital.
Up until now this has been readily available. Last year all the talk was of walls of cash and record levels of “dry powder”.
This year, not so much.
Inflation means the cost of capital is rising. Borrowing costs more. It’s harder for start-ups and growth stage businesses to hit their investor milestones, to provide a timely return on investment and the short exit timeframes beloved of VC.
Who’s most vulnerable?
In addition to the current economic challenges and capital markets headwinds, some sectors face additional issues. As we move into the post-pandemic era, some companies that did well from consumers in lockdown, such as video call, streaming services and ecommerce, have seen demand fall.
The pressure is on to find a faster route to profitability. The focus is less on growth and more on self-reliance. Cost structures have to be corrected and cash is king.
So what’s happening now is more akin to rightsizing than downsizing.
Companies that have been hiring for growth have to change tack. Recruitment policies have to be redrawn. Even behemoths such as Meta, Alphabet, Amazon and Microsoft are revising their approach.
So what’s the good news?
On the plus side, the labour market remains tight. Tech skills are still very much in demand and the battle for talent is as vigorously contested as ever.
Salaries are holding firm and demographics are working in your favour. More older workers are retiring than there are younger ones to replace them.
The rise of immersive, IoT and Factory 4.0 technologies is inexorable and gathering pace. As 5G and 6G roll-outs get underway, demand for skills in these areas will only rise.
How do I protect myself?
To stay resilient in the tech sector, invest in your skills or find an employer who will.
If you’re going to move, choose an employer that can show it puts serious investment into skills training and development.
If possible, skew towards sectors that are less exposed to economic cycles, such as regtech or insuretech.
Develop your brand. Work on your CV. Ensure relevant social profiles contain all the right skills so that recruitment algorithms can find you. Be proactive, reach out.
Every day new tech jobs are uploaded to the Silicon Canals Job Board with great roles on offer, including:
Senior IT Project Manager, Ratiodata SE, Kassel
Ratiodata SE, is one of the largest managed service providers in Germany. It is looking for a Senior IT Project Manager who will have responsibility for roll-out, migration and transition projects as well as responsibility for projects from preparation to completion in compliance with deadlines, content and budget. You’ll also be responsible for interface management between customers, internal contacts and external service providers. Find out more here.
Tech Lead React / Kotlin H/F, SELECTRA
Selectra’s R&D software department, based in Cestas, France, is looking for a Tech Lead React Kotlin, as it moves towards Industry 4.0. You will be the technical go-to on the team in charge of developments which allow the company to offer customers dashboards for visualising performance indicators of their cutting rooms. You will guarantee the application of good development practices (architecture, code quality), actively contribute to prototyping and development, and carry out actions aimed at the autonomy and technical excellence of the developers in your team, in collaboration with your manager. Find out more.
Systems Engineer, Airbnb, Dublin
The Systems Engineer is responsible for supporting the hosting environment of internal staff and applications, all build and configuration management needed to support that environment at scale. This role maintains tools and services that support the hosting and operations such as repository, configuration management and CI/CD. You will be comfortable with multiple platforms and can design and maintain infrastructure through code. Get full information here.
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