Despite the headlines of layoffs and hiring freezes at tech-focused companies, the overall job market for technology professionals is believed to expand over the years as organizations develop and advance their infrastructure to meet consumers' increasing demand for digital goods and services.
Apparently, job cuts in the US alone have risen in 2022, with a 6% increase. One of the main drivers of this is the tech sector, as numerous high-profile tech companies, including Facebook’s Meta, Twitter and Amazon announced massive layoffs within the last quarter of the year.
It is estimated that in 2022 alone, over 120,000 people have been dismissed from their tech jobs, from the biggest players as well as smaller firms and startups.
Looking from a brighter perspective, the pressure created by talent shortage in tech could ease off with the now deeper pool of potential hires available in the market. With traditional enterprises like retail, banking and manufacturing having a harder time competing with big tech for talent a year ago, redistribution of tech talents might be the perfect growth opportunity in place.
Among the top tech roles employers sought to fill in 2022 — and most likely in the next few years — are software developers, system and network engineers and IT support specialists and project managers.
The Downsizing Phenomenon
The tech workforce is also impacted by the effects of macroeconomic change, but it has shown remarkable resilience. And yet, many fintech funds and crypto funds have gone bankrupt. Start-up activity has become stagnant and capital-hungry tech companies have kicked out numerous employees to survive — or some just to adapt to the current happenings in the industry.
Layoffs are having an impact on the entire tech industry, and the phenomenon is seen globally. Some of the most high-profile examples of mass layoffs in 2022 are Meta and Twitter. Although the 13% reduction in headcount is painful for Meta, it’s worth considering a more broad perspective which is to sustain its overall operations. The multinational tech conglomerate has struggled financially in 2022 as it has tried to move into the metaverse business while grappling with a global economic slowdown and a decline in digital advertising.
The new management under Elon Musk has slashed 50% of the social media platform’s workforce in a span of months, along with thousands of contractual workers. Known as a mercurial executive, Musk has triggered the dissolution of Twitter's engineering, ethical AI, content moderation and public policy teams.
Because of this, Twitter has been hit with allegations from 100 former employees affected by mass layoffs at the company. They are claiming against more women being laid off than men as well as for those terminated employees who were actively on medical or parental leave.
From a bird’s eye, amidst these massive layoffs, the rising digitization, remote working trends and the rapid pace of technological change still drive the demand for tech talent higher than ever.
Rise of New-Generation Talents
When employers cut roles no longer critical to their business operations, laid-off workers from the tech sector undeniably offer a wide range of highly sought-after skills such as artificial intelligence, automation, data management, cloud, customer experience, cybersecurity and more. By recruiting and hiring former members of the world’s leading digital companies, traditional companies can gain access to new talents who can turn their ordinary business models into competent ones.
However, the good news is that we are seeing a rising number of next-generation talents pursuing a career in STEM. From this, employers can also benefit from investing in the reskilling of their existing workforce. According to the US labor department, in 2021, there were nearly 10 million workers in STEM occupations and this is projected to grow by almost 11% by 2031.
Many individuals can now work from anywhere, giving employers, HR teams and managers the ability to cast a wider net in their search for talent. Relative to in-demand skills, employers are taking a holistic approach by targeting talents who are capable of conceptualizing as well as delivering projects from inception to completion. There is also a growing need for tech positions with management skills and infrastructure knowledge, with the surge of computing and advanced networks like 5G, IoT and Wi-Fi 6. These skills are increasingly becoming key for employers, as it allows them to continue developing critical tech infrastructure that can drive more profitability and sustainable development. As more projects are executed in the cloud, cloud computing has enjoyed the strongest year-over-year growth in job postings, and the demand for master data engineers increased by over 300%.
Tech Talent Hubs
Vancouver and Seattle combined for 90,000 new tech jobs from 2016 to 2021. While on the other hand, Toronto saw the highest growth in tech talent in the same period and Ottawa recorded North America’s highest tech workforce concentration.
As more companies extend their office operations to Toronto, the city develops at a fast pace, enabling it to outrank other countries and become the largest tech talent hub in North America. Often referred to as Silicon Valley North, Toronto has some of the world’s leading academic institutions that are known for producing promising engineers and developers. Moreover, tech talent in Toronto costs less than half that of San Francisco and about 50% less than either New York or Seattle.
A talent hub in the digital age will be different from in the past as accumulated knowledge won’t be enough. Creativity, integration of intelligence and ability to progress are more important, equipped with highly-skilled people and R&D. With the right mix of policies that leverage and attract digital talents and tech companies, North America will continue to nurture dynamic hubs that will impact international business.