There was a time between late 2019 and early 2023 when US tech companies were lining up to hire employees. In fact, Meta employees went so far as to say that they had actually only been hired to avoid being hired by their competitors. There was plenty of work to do, so employees could afford to change jobs to improve their pay.
The tech job landscape has changed dramatically in recent years. From 2023, news of large rounds of mass layoffs are the order of the day and companies have begun to freeze new hiring to maintain more agile workforces, as Mark Zuckerberg explained in the podcast ‘Morning Brew Daily’.
As a result of the cooling of the US labor market, technology professionals are finding it increasingly difficult to find new employment.
Fewer vacancies in technologyAccording to data from the Federal Reserve Bank of St. Louis based on records from the Indeed.com employment portal, job postings in software development have decreased by more than 30% since February 2020. This decline serves as an indicator that not only are employees in the technology sector being laid off, but new hiring has not been drastically reduced.
For many workers, especially younger ones, this is the first time they have faced a tough job market in the sector. Unlike previous years, when demand for tech talent was extremely high, there has now been a significant reduction in the number of vacancies.
It is more difficult to find a jobA few days ago, WorldOfSoftware published a study with the figures for layoffs in the technology sector in the US, estimating more than 260,000 layoffs in 2023, and some 211,033 so far in 2024.
The Wall Street Journal published the testimonies of some of these employees of technology companies who lost their jobs in one of these rounds of layoffs and they all agreed on the difficulty of finding a job in one of the technology companies that until a couple of years ago were fighting over them.
Chris Volz, a 47-year-old engineering manager, has been working in tech since the late 1990s and was one of those affected by a round of layoffs in 2023. He says that throughout his career, he had drawn on his network to find new jobs quickly, but this time, most of his contacts had also been laid off like him.
Business strategies and the economic context. As revealed in the April 2024 US labor market report by BBVA Research, the increase in interest rates, the inflationary context and the shadow of a recession in the US economy have led companies to contain spending and freeze their growth plans, as reported by the newspaper Five Days.
This slowdown in growth expectations has led to the halting of experimental or high-risk projects, which have led to a greater focus on profitable products and services, as we have recently seen in the moves made by companies such as Apple and Google, which have even fired people from the department in charge of hiring for the company.
Fewer contracts, fewer salary increases. According to data from the Pequity salary platform published by The Wall Street Journal In its article, the stagnation of the US labor market has also led to a stagnation in salary increases for employees in the technology sector, which the American media estimates at 0.95% with respect to 2023.
The shock wave is already beginning to be felt in SpainAs already happened with the phenomenon of The Great Resignation or mass layoffs, what impacted the United States like a tsunami has reached Spain in a much more attenuated form.
However, data from the 2024 Labour Market Trends Report in Spain prepared by the SEPE indicate that contracts in the programming, consulting and other IT-related activities sector are seeing a decline in the number of hires compared to the historic peak recorded in 2022, which leaves us at levels seen in mid-2020. All this taking into account that this sector has had a growth rate of 26.10% while the rest of the activities did so at 1.94%.
At WorldOfSoftware | The Great Resignation in the US has come to a screeching halt. It is a sign that bad news for employment is approaching
Imagen | Unsplash (Hannah Wei)