Understanding the effects of mass layoffs on the tech sector.

11 May 2023

CIO Deep Dive – After the layoffs in big tech throughout 2022 and early 2023, trends indicate a shift in focus towards efficiency in hiring, with big tech companies realigning their hiring strategies to pre-pandemic levels. In 2023 to date, it’s estimated that 485 companies laid off 138,000 workers, affecting various industries beyond IT. Despite the ongoing demand for IT professionals, big tech is unlikely to continue hiring at the same rate as in previous years.

Job postings have decreased for specific categories, and demand has returned to pre-pandemic levels, with HR departments still struggling to recruit skilled software developers. This trend is expected to persist throughout 2023. The most in-demand roles include DevOps, data analytics, and security. Companies are focusing on retaining junior talent while cutting senior positions.

Amid these changes, average technology salaries for software developers remained flat during 2022, prompting businesses to consider candidates with unconventional backgrounds as a solution to filling skill gaps.

Tech giants such as Google and Salesforce are using layoffs as an opportunity to adjust salaries, compensation, and hiring strategies. Between 2019-2022, many companies increased their headcount to meet the demand for services and products, with software engineers, data analytics, and AI experts commanding higher salaries and remote work benefits. In the wake of recent layoffs and restructuring, these firms are eliminating benefits, perks, and other employee advantages to realign their human capital management, reassess labor costs, and improve operational efficiency.

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