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Read on for the latest insights on layoffs, how we got here, and important upcoming changes you should be on top of.
It’s all on our minds right now: with the way the tech market is going, is it still worth pivoting into tech and product in 2023? And that's a fair question to ask considering the recent news about tech layoffs and the uncertainty caused by the Cambrian explosion of generative tech and AI tools. Do we even need more tech workers in the future?
It's easy to fall to speculations so let's take a look at what reports, facts, and expert opinions have to say.
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Q1 of 2023 was witness to the recent successive layoffs in the tech industry. Even household tech giants like Google, Amazon, and Microsoft were not spared. This wasn’t a new trend as the previous year saw 1,557 rounds of layoffs affecting 243,318 workers.
That’s a staggering 667 laid off tech workers per day!
For context, 98% of US businesses have less than 100 employees. Put in another perspective, Nintendo has 6,717 employees servicing 102 million users. A company of this magnitude only takes 10 days of layoffs to lose its entire workforce in the current job climate.
Of course, it’s not like any sane company will let itself bleed like that – but it does paint a not so pretty picture of today’s employer’s market. Entire companies can vanish overnight, resulting in an oversupply of tech talent looking for their new homes.
This is a gentle reminder of the volatile nature of employment in today’s job market, and the grim reality of things yet to come –
But wait a minute .. is everything really all doom and gloom in the tech space? Turns out it’s not!
Blog post spoilers: Tech companies are still hiring. IT sector forecasted to still grow the fastest.
📖 Additional Reading: Comprehensive list of tech layoffs in 2023
Before we can understand how the current job market came to be, we have to look into several elements leading to these layoffs.
When the COVID-19 pandemic paralyzed global economies, tech companies were at the right time and place to capitalize and catch the unexpected windfall. The new policies to curb the spread of the coronavirus, forced billions of people to stay inside their homes indefinitely. This led to a paradigm shift in customer behaviours as social distancing became the norm.
There was a sudden influx of demand for many of the services that Big Tech were offering. From internet devices like Apple’s iPhones and Macs, and digital entertainment with Netflix, to a rising online shopping culture led by Amazon, many customers had to reexamine the way they interact with goods and services.
It had tremendous ripple effects that seemed to reach every company in Silicon Valley - and beyond.
Remember how Zoom grew its active users by 2,900%? That’s a sweet honey pot any investor would want to have a piece of.
To meet the growing demand for online services, many tech companies went into a massive hiring spree that doubled their headcount compared from 2019 to 2022. Amazon for example had 750k employees in 2019 and ballooned to 1.5 million in 2022. These business decisions were made gambling on the extended prospect of the restrictions brought about by the pandemic.
And so, while there has been an onslaught of tech layoff LinkedIn posts, macroeconomically speaking - these only brought down the level of staffing back in 2021 levels. Cruelly put, this was a market correction that was bound to happen when the expected pandemic gains didn’t gain as much traction as many tech companies hoped it would have had.
Is this how a free market works? Absolutely. Does it make any less horrendous for those who were laid off? Absolutely not.
Regardless, the primary takeaway here is this: The tech job market is still inclining.
There’s still enough evidence to make a compelling argument that it will recline back to previous levels. Just that it may take some time to recover.
Now, onto the question of when we’ll go back to the tech job market with stratospheric salaries – the answer is simply: we don’t know.
No one knows.
And if someone says they do, that should ring alarm bells.
There are a lot of uncertain elements on the table that need to be deciphered before we can make a remotely sensible prediction. Many of them are issues that transcend borders and are so enormous in scale that the best we can do is rely on guesswork.
Some of these are the resolution of the Russo-Ukrainian War causing global supply chain issues, rising oil prices that massively affected pricing of commodities, and a looming recession sandwiched in between - all of which are intricately interwoven factors that are creating their own separate feedback loops.
And so, the best we can do is to fall back to expert opinion. Fortunately, good news is still on the side of aspiring Product Managers, UI/UX Designers, Software Developers, and other tech-adjacent related roles.
It is forecasted that the tech job market will continue to grow in 2023, albeit in a slower demand compared to previous years.
It most definitely is.
It may be difficult to enter the job market this year but it doesn’t take away from the fact that the tech industry is still forecasted to grow the fastest.
Relative to other sectors, IT still has the lead when it comes to growth. It is apparent that the direction of technological adoption will always lead to more adoption instead of less.
This means that there will be more job opportunities to be created as we start to fully embrace technological advancements. And this still rings true even with the loud clamour against era-defining innovations like Artificial Intelligence.
Again, you will not be replaced by AI. You will be replaced by someone who knows how to use AI to the fullest.
If AI will inevitably transform the way we work anyway, the earlier we adopt the better our chances of riding this metamorphic change. More than ever, today may have been the easiest time to learn how to code with the rise of assistive technology like GitHub Copilot.
Some roles, like Product Management, don’t even require you to code. Nor will you need a very expensive MBA degree. In fact, AI Product Management is also a budding product role.
Ultimately, the tech space is still worth shifting to. You have to consider that building a career is as much as looking into long-term prospects as it is hawking on your immediate prospects. One good way to increase your long-term success is by learning how to network.
Times may be difficult but it’s imperative we remember that the tech industry has survived greater turbulence. It predictably moves in boom-and-bust cycles starting from the mass commercial adoption of computers in the 1980s, which peaked years after Netspace went public in 1995, only to nosedive during the dot-com crash of 2000’s, and picking up again after the 2008 recession – ultimately leading to the pre-pandemic salary compensations everyone was after. And until, finally, the pandemic ground everything to a halt.
The tech industry history is giving us much reference that an economic upturn is to be expected. Do note that many of the dot-com crash survivors (e.g. Google, Amazon, and ebay) are today’s gargantuan tech companies.
Working in tech is a great way to observe, experience, and live the way new technologies warp and shape human behaviour. It also means being at the forefront of exciting new products, solutions, and trends before they hit the market. These are just some of the non-tangible considerations that make working in tech very rewarding.
However, present tech job market realities reflect that things are tight. There’s a need to considerably upskill to stand out in a sea of aspiring tech applicants.
With a program like Co.Lab, you can learn how to build your tech skills with a supportive community and pre-vetted industry mentors to guide you along your tech journey. It may be difficult to make the shift into tech, but that’s precisely why you don’t have to do it alone. Be part of the community.
Because with Co.Lab –
You Belong in Tech
Are you an aspiring Product Manager, Product Designer, or Software Developer? The Co.Lab program is the perfect place to gain real-world, cross-functional experience that you wouldn’t get anywhere else. Follow us on on Instagram, Twitter, and LinkedIn for the latest updates.