The Impacts of Economic Trends on Tech Jobs

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By Jennifer L. Hay

There is a great deal of speculation about how current economic trends might impact employment in the tech industry.  I found Nick Kolakowski’s article – ‘Despite Layoffs, Tech Industry’s Hiring Rate (and Salaries) Remain Strong ‘ to be a great starting point to think about what the data tells us.

Despite Layoffs, Tech Industry’s Hiring Rate (and Salaries) Remain Strong

As with most things, there is never a single cause, but a result of multiple influences. And that is certainly true here. The most common causes of layoffs are financial, and here the author calls out slowing revenues, fears of inflation, and conserving cash. He also mentions a slowdown in venture capital funding, which is sure to affect tech startups.

In addition to financial influences, I think it is also possible that productivity gains brought about by the pandemic-driven work-from-home shift may also contribute. For example, many of my clients describe being far more productive when working from home. You have to wonder whether employers are finding that they need fewer employees. Unfortunately the chart shows a point in time and doesn’t show history, so it is not possible to conclude it is trend or a pattern that will continue into the future.

Understanding the graph – Recent Tech Layoffs – requires the critical thinking skills that are essential in data analysis, so I sent the article to a colleague who is data analyst and received this reply.

The graph shows a total of 6748 layoffs. Of the total, 3100 are related to used car sales—Carvana with 2500 layoffs and Cars24 with 600. Not surprising given that the entire car sales industry struggled with pandemic effects. Chip shortages radically reduced production of new cars. New car sales slowed which obviously reduced the supply of used car trade-ins. Car prices, both new and used, soared. The entire automobile market slowed dramatically. And the used car sales business accounts for 46% of the reported layoffs.

If we assume these are US layoffs, the number of tech jobs exceeds 12 million, making 6748 layoffs slightly more than 1/2 of 1 percent. If global, the number of jobs is 55.3 million, with reported  layoffs approximately 1/10 of 1 percent.

You have to ask yourself whether this is significant when you think about the overall numbers. In any case, strong data analysis skills coupled with industry knowledge are key to understanding the current impacts. If you want to understand potential trends, you’ll need to analyze historical data.

 

 

About Jennifer Hay

I’ve been writing technical resumes and advising on career transitions for almost 15 years.

Throughout that time, I’ve read numerous articles about best practices for IT resume writing. What I found in those articles is a lot of bad information because it’s the same advice they give for non-technical professionals. This is important because IT resumes are different.

I built this website to share what I’ve learned in my career. I think you’ll find information on this website that will help make your IT resume a success.

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