The technology industry, which had seen significant growth during the pandemic years, is shedding thousands of jobs as it adjusts to the current market conditions. According to industry tracker reports, as many as 200,000 tech jobs have been lost globally since the start of 2022.
The wave of layoffs has continued into 2023, with some of the industry’s biggest names, such as Alphabet (Google), Microsoft, and Amazon, announcing job cuts.
The layoffs are a continuation of the industry’s effort to find a sustainable model, as the rapid revenue growth seen during the pandemic is not expected to be sustained in the current market conditions.
The soft market conditions, combined with the rise in interest rates and inflation, have resulted in a lack of liquidity for expansion. The lack of funding has forced the industry to right-size its headcount.
The tech industry is not the only sector affected by the changes in the market. The banking sector is also feeling the heat, with banks such as Goldman Sachs, Credit Suisse, and HSBC announcing staff cuts. However, it is a mixed picture, as other banks are still hiring.
The sharp rise in the safe rate of return, which is the US Treasury return, has had a significant impact on the industry. Investment banks, which rely heavily on fee-based activities such as mergers and acquisitions, have seen a decline in business, leading to consolidation in the industry.
Despite the job losses, there are still bright spots for those searching for career opportunities, particularly in sectors that are benefiting from the global economies opening up post-pandemic.
The service sector, such as aviation and tourism, is still in high demand and is actively hiring as many workers as possible to meet the demand. In the banking sector, there are many pockets of opportunities, and the venture capital scene is still active. Entrepreneurs with interesting ideas can still find substantial capital to invest in.
The tech sector is not the end of the road either. Despite the layoffs making headlines, companies are still actively hiring and investing selectively to future-proof their businesses. For example, Microsoft has invested $10 billion in OpenAI and will require relevant talent to support its business functions.
In Singapore, companies such as Binance, Bydance, and Lazada are still looking to attract tech talent to join them.
The influx of tech workers into the job market could even spell good news for smaller firms. The tech talent spreading out, especially from the big tech companies, to the smaller companies and SMEs is an opportunity on both sides. The smaller companies and SMEs are crying out for tech talent, and this is a chance for them to attract talent that was previously unavailable.