The tech industry in the United States has seen an unpredictable increase in job losses in the past year, the highest since the dot-com bubble of the past few decades. This past year, the amount of layoffs is 649% higher than the total of 2020 and 2021 combined.
In 2023, companies like Google, Meta, Amazon, Microsoft, Yahoo, and Zoom laid off thousands of tech workers. Startups in various industries, such as crypto and enterprise SaaS, have also cut their workforce. These layoffs are attributed to the economy's current state and the need to bring financial stability.
While tracking these layoffs can help understand the effect on innovation and which companies are growing, it's also a reminder of the human toll of job losses and the changing risk profiles for organizations.
Here's a list of 2023 tech layoffs for the first two months
January: 84,714 employees laid off
February: 36,491 employees laid off
There could be several reasons for the recent tech layoffs in the United States, and some of them include the following:
Economic downturn: Economic downturns can lead to decreased consumer spending and corporate profits, prompting companies to cut costs by laying off employees.
Company restructuring: Companies may undergo restructuring efforts to improve efficiency, streamline operations, or pivot to new business models, which may result in layoffs.
Mergers and acquisitions: When companies merge or are acquired, there may overlap in job roles, resulting in redundancies and layoffs.
Automation and technology advancements: Automation and technological advancements can result in some job roles needing to be updated, which may lead to layoffs.
Shift in market demand: Shifts in market demand, such as a decline for a particular product or service, can lead to companies downsizing and laying off employees.
It's important to note that layoffs are often a difficult decision for companies to make and can significantly impact employees and their families.
Despite these job losses in the last two years, there is still a need for people in the IT industry, especially in certain areas.
A report by Janco Associates reveals that there is still a great demand for experienced IT professionals in the US, with more than 100,000 jobs currently available. These roles range from coders and application designers to security and compliance specialists to blockchain and e-commerce engineers, all at different levels.
Additionally, around 12,000-14,000 jobs were newly created each month in the past year, amounting to over 37,000 positions in the last three months, in addition to the 100,000 jobs filled monthly in the same sector.
You may be surprised to find out which states have the most IT jobs per 10,000 residents. Washington, DC, has the highest amount, with 581 IT positions for every 10,000 citizens.
Other places with many IT jobs include Cedar Rapids, Iowa (526); Bloomington, Illinois (503); Grand Rapids, Wyoming (450); and Boulder, Colorado (443).
Cedar Rapids was acknowledged as the 2018 Large Technology Community of the Year by the Tech Association of Iowa and is home to various Fortune 500 IT, renewable energy, and aerospace companies.
Despite the ongoing job losses, the unemployment rate in the tech industry has stayed close to record lows, around 2.2%, which is not as high as the US average of 3.7% in October.
CompTIA, a nonprofit organization for the IT industry and its employees, has reported that employment in the tech sector has risen by 193,900 jobs in 2021, 28% more than in 2020, and will keep increasing in 2023.
As technology advances, such as cloud-based data and software, the need for cybersecurity continues to grow. It is predicted to be worth up to $400 billion by 2026.
Between 2015 and 2020, the most significant increase in job growth was seen in information security (183%), followed by software developers, testers, and QA assurance (102%), database administrators (100%), and computer and information research scientists (99%).
IT Industry is an expanding field across many industries, and IT salaries in the retail trade have been increasing the fastest, with an average increase of $32,000 (48%) between 2015 and 2020. This is due to the booming e-commerce industry, which has seen a 40% growth.
An increase in IT jobs with an average salary of $99,000 makes retail trade the top industry for IT jobs. So no matter the reason for continuous layoffs from the tech giants, the demand for IT support is growing, and employment and salaries in IT are rising to meet it.
Stay tuned with Recruitometry for upcoming blogs on IT Industry and Tech Updates from different parts of the world.
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