There’s been a lot of talk about how big tech’s mass layoffs are easing the tech talent shortage. But the facts don’t show any change in the availability of qualified tech talent. Even when you combine all the layoffs over the past 18 months — Google, Meta, Microsoft, Amazon, Twitter, Lyft — the total is not significant compared to market demand.
The tech-talent shortage is alive and kicking and will continue for the foreseeable future.
In fact, Gartner research found that the companies behind the ten largest recent layoffs still employ over 150,000 more people in total than at the beginning of 2020.
In Leapfrog’s hands-on IT management and cybersecurity world, we’re still seeing a dramatically tight tech labor market and a strong demand for talented IT workers who know what they’re doing — qualified personnel are not sitting on the bench.
When IT professionals do sit on the bench, it’s to update their resumes before heading off to the next great opportunity.
Why all the layoffs?
Does the theory that The Bosses Are Back in Charge — which is based on the idea that workers are starting to worry about job security again — apply to tech jobs? Flexing bosses are not the main reason behind the tech layoffs.
Rather, Tech Downsizes points to a pandemic boom-and-bust cycle that is now “resetting” back to the fundamentals. This is what Leapfrog is seeing and what our industry is discussing internally.
The demand for tech workers skyrocketed during the pandemic, but as a recession began to loom, boards and investors wanted companies to scale back. Escalated growth can only continue for so long, and the tech sector is especially market-sensitive.
On the other hand, the author of Big Tech Has Layoffs All Wrong argues that big tech shouldn’t engage in mass layoffs. The reasoning is these companies have built their successes on innovation, disruption, and talent retention, so letting go of talent for short-term, budget-cut gratification will ultimately create a net-negative drag on the company’s performance over time.
Leapfrog disagrees that mass layoffs are misguided — we see the logic behind them. Now that tech companies are no longer experiencing double-digit growth, money costs more, and turnover is more expensive, they’re correcting for current market conditions.
Last hired, first fired?
There’s another aspect of mass tech layoffs that companies should keep in mind. Gartner reports that the data show the layoffs aren’t impacting new hires only. Recent layoffs have affected many different types of tech employees, and CIOs are losing talented employees faster than they can hire new ones.
The demand for true IT talent (not just tech workers) remains as tight or tighter than before — especially in cybersecurity, data science, and software engineering. There are not enough qualified individuals to meet market demand.
As a result, the tech talent crunch will continue, and the cost for that talent will continue to increase due to competition.
Grow the talent pool to satisfy demand
Leapfrog cautions that companies should expect to see more tech-talent volatility as the market continues to work through pandemic aftershocks, inflation, and other economic pressures — so it makes sense that when you see news about big tech layoffs more, the takeaway is more about a needed correction rather than a shift in tech-talent availability.
The real end to the tech talent shortage will come when we grow the talent pool of skilled IT workers.
As an IT partner specializing in simplifying and securing IT environments and processes, Leapfrog frees our clients from the responsibility of continually finding, hiring, training, and retaining tech talent. We continually recruit and train in an effort to absorb both growth and inevitable employee turnover, regardless of market conditions.
