The tech industry has not been immune to the effects of the recession in 2023. In recent months, we have seen an increasing number of IT companies resort to drastic cost-cutting measures such as mass layoffs in order to stay afloat.
This can be an especially stressful time for programmers as they try to navigate the ever-changing job market and stay in demand. In this article, we'll look at the causes of the IT recession, why engineers are being laid off in droves, and offer some tips on how to stay relevant and in demand during these challenging times.
Is Global Recession Coming?
A worldwide recession has serious consequences for the world's leading economies, including the United States, China, Japan, Germany, and the United Kingdom. A recession is often defined as a drop in economic activity, which can result in job losses, reduced consumer spending, and reduced investment.
During a recession, many well-known and other companies reduced hiring and investment plans, resulting in more unemployment and slower economic development. Countries that rely significantly on exports are especially vulnerable, as decreased demand from other countries may harm their economies. And all of these we can easily observe right now.
How is it going in Top Countries Economic Leaders?
According to numerous experts, the United States is facing increased recession fears as the Federal Reserve, the country's central bank, remains bullish on combating excessive international inflation and officials increasingly talk about the need to impose some economic pain to get pricing pressures under control.
According to a Financial Times survey, the United Kingdom is facing a "deeper and more prolonged recession" than any other country in the G7, a global policy forum representing seven of the world's most advanced economies. Approximately four-fifths of economists believe the United Kingdom will be burdened by a much longer recession than its peers.
China's GDP is expected to rise beyond 5% in 2023 if the government abandons its "dynamic zero-COVID" plan next year. Growth in industrial production will decrease in 2023 as external demand moderates.
If you would like to know more about the state in the Top Leading Countries Worldwide, click here.
Tech Layoffs In Numbers
More jobs were lost in the first quarter of 2023 than in the entire year of 2022. Thousands of people will be laid off by companies in the tech industry in the first few weeks of 2023, according to announcements made by them across the industry.
Just look at the numbers prepared by Techcrunch:
- January: >84,714 employees laid off
- February: >36,491 employees laid off
- March: >37,109 employees laid off
‘So far this year, 494 tech companies have laid off 138,820 people’
Some massive examples of layoffs in Big Tech companies, except, of course, Twitter with its 75% of cutting crew, are:
In late January, it announced the layoff of 12,000 employees. Sundar Pichai, CEO of Alphabet, wasn't shy about explaining why: Alphabet was hiring for a "different economic reality" and restructuring to focus on the internet giant's most critical companies.
Meta
Meta cut 11,000 positions in the fall of 2022, but it wasn't done. In March 2023, the firm announced plans to lay off about 10,000 employees in an effort to reduce costs even more.
Zoom
In February, the company announced the layoff of over 1,300 people, or 15% of its workforce. According to CEO Eric Yuan, the layoffs are necessary to help the company thrive in a difficult economy.
Yahoo
The internet company said in February that it would lay off more than 20% of its personnel, or more than 1,600 individuals, by 2023. The majority of those cuts, or approximately 1,000 positions, were made immediately.
Techcrunch prepared an interesting article about it, if you would like to know more about the rest of the companies in a list.
Main Reasons Why Companies Keep Cutting Their Crew
There are several reasons why businesses may reduce their workforce during the recession. Here are some of the most important reasons:
- A decrease in overall profits as well as an increase in revenue. When revenue falls, businesses look for ways to cut costs, and staffing is often the first to go.
- The need to increase productivity and efficiency. Businesses want to increase their efficiency and streamline their processes. Many jobs are being laid off as a result of technological alternatives such as automation.
- Keeping the competition going. Large technology companies frequently view layoffs as one strategy for staying ahead of the competition.
- Automation and artificial intelligence are being developed. As a result of the rise of AI and automation, more and more jobs are being replaced by technology, resulting in job losses.
- Concerns about a possible recession. Businesses are cutting costs and staff in anticipation of a possible economic downturn.
Tips for Surviving a Downturn
Don’t panic. It’s a temporary state, but let’s consider some of the pieces of advice below to stay in demand as a developer in these hard times and later in the future.
Keep Learning and Specialize in a Niche
The technology sector is always changing, and you, as a software developer, must keep up with the latest technologies and programming languages. This will not only keep you competitive, but will also make you more useful to your present or prospective employer.
Specializing in a specific niche such as AI, Blocckchain, IoT, WEB 3.0 can help you stand out from the crowd. This could be a new technology or a highly sought-after area of expertise. Classes at FreeCodeCamp, Treehouse, uDemy etc. tend to be good places to start.
Market Yourself
Create an online portfolio or a personal website that highlights your work, abilities, and accomplishments. A strong internet presence might assist you in attracting prospective jobs or clients. Participate in industry events, online forums, professional associations, and interactions with peers and mentors.
Soft Skills
In addition to your technical background, businesses need developers who have good soft skills such as communication, teamwork, and problem-solving abilities. Concentrate on honing these talents as well.
Be open to new ideas, accepting of change, and eager to learn new technology and approaches. Attending the right meetings and working on significant initiatives is an excellent method to show leadership that you're actively contributing.
What next?
The number of registered startups has increased due to mass layoffs at global tech giants. For example, in 2022 by 20%, and in January 2023 the number of applications is five times more than in the same period last year.
Why does this happen? Investors are afraid of the collapse of company shares against the background of the general economic downturn and new trends, so advantages are given to market startups.
There have always been places to work and there are less complicated and more appealing options for locating projects and jobs. Despite the war and relocations, internal and external transfers of technical expertise, European, particularly Ukrainian, regions are in high demand for employing remote workers. So if you are based in Europe, you can try to find your top-notch job with Devler.io and, be sure, here you will be matched only with verified clients.
Devler.io is a complete platform that connects vetted European software development professionals with clients from all around the world. It is designed to help programmers improve their abilities by engaging in high-quality projects, maintaining their Work-Life Balance, and collaborating with other Dev's Network members.
Welcome to the European Devs Network. Become a Devler - and you will meet:
- A freedom of choice to work full - or part-time,
- Competitive salary according to your skills,
- Efficient and direct communication with a client,
- No recession.
How did your company navigate the IT recession, and what strategies were most effective?
Or did the recession lead to any changes in your organization's approach to technology investment or innovation?
What were some of the biggest challenges you faced during the recession, and how did you overcome them?
Share in the comments section below, we would like to know more.
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