We are all well aware of the global economy’s current obstacles: rising inflation, fuel prices, food prices, interest rates, massive layoffs from the largest tech corporations, and political uncertainty as the US midterm elections unravel.
What does this mean if you work in tech? Is your job secure? What are the chances you can find lucrative work elsewhere if not?
Let’s take a look.
Hiring slowdowns
The coronavirus pandemic brought an unprecedented surge to the software industry as the world sheltered in place and adopted remote work technologies. Now the market is beginning to stabilize itself. The largest software companies are still earning healthy profits this fiscal year, but they’re less robust than the growth seen in 2020/2021. Microsoft reported $51.9 billion in revenue projection for FY22 Q4, a 12% increase year over year. This is compared to a Q3 revenue increase of 18% and a Q2 increase of 20%. Meta is in low spirits after seeing a 4% decrease year over year in FY22 Q3. Revenue earnings are still strong overall for the largest corporations but not as strong as they hoped for 2022, hence the hiring freezes.
The revenue decrease across the tech sector results from a few key factors. People are spending less time and money on electronic devices and software programs compared to lockdown, coupled with rising interest rates making less capital available. It is to be expected as the world slowly returns to pre-pandemic business-as-usual. However, as consumer demand cools down, so does hiring demand.
Keep in mind that companies like Meta and Twitter have been losing popularity in recent years. Meta came under fire in 2021 after it came to light that its content algorithms promote social and political controversy for the sake of keeping users on its site. Twitter is in disarray after Elon Musk’s takeover. The company’s new business model allows for limited moderation of free speech which has flooded the site with prejudice and anti-semitic rhetoric. The loss of the public’s faith in these platforms is arguably a more significant indicator of their plummeting values than inflation and interest rates.
Why you shouldn’t worry
It’s not all doom and gloom, though. The big tech hiring freeze has freed talented tech professionals to exercise their strengths at late-stage startups throughout the tech sector. While early-stage startups experiencing VC withdrawal are tightening their belts with hiring slowdowns, the more stable startups that have secured funding have the means to attract runoff talent from the thousands of big tech employees who were laid off this past summer.
According to a recent survey conducted by A.Team hiring firm partnered with MassChallenge, around 40% of US startups are boosting their hiring plans through the end of 2022. Also, the tech labor market is becoming easier to navigate for recruiters as demand cools down compared to 2021. More talented programmers/engineers are available because the decrease in demand frees them up from the grip of the tech giants keen on cornering all the talent in the face of the pandemic.
As recently laid-off employees from tech’s most prominent names scramble for work, one sector of the tech economy is worth investigating. Environmental tech startups are on a steady rise, and their popularity/funding is still growing. Sustainability startups raised $5.6 billion in the first six months of 2022, and Pitchbook predicts they will collectively be worth $1.4 trillion by 2027. If you’re looking for work and a chance to impact the world positively, then now is the perfect time to apply to these companies.
Conclusion
The future of the tech economy is uncertain right now. Still, the current economic situation results from an ongoing global emergency that seemingly stirs significant changes overnight. IT careers are still some of the fastest-growing job markets in the US with jobs like web developers and information security analysts still projected to grow by 30% and 35% over the next ten years (respectively). Recent layoffs will inevitably bring more competition for jobs, yes. However, stable career paths and revenue are still available to those who meet the qualifications of today’s market.
For more information:
https://www.microsoft.com/en-us/Investor/earnings/FY-2022-Q4/press-release-webcast
https://techcrunch.com/2022/11/05/laid-off-climate-tech-is-looking-for-talent-and-founders/
https://www.bls.gov/ooh/fastest-growing.htm
https://techcrunch.com/2022/10/25/five-questions-to-consider-ahead-of-big-techs-q3-earnings/
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