Even as high-profile layoffs continue in the tech sector, the demand for experienced IT professionals remains high, according to a new report by IT employment consultancy Janco Associates.
Over 100,000 jobs for experienced IT pros remain unfilled in the US, according to Janco’s report. Those job roles include coders, application design specialists, security and compliance specialists, and blockchain/e-commence engineers at all levels.
Yet, Janco’s report noted, the total number of unfilled jobs for IT professionals has in the past six months dropped from over 250,000 to 200,000.
At the same time, approximately 100,000 jobs are filled each month, with 12,000 to 14,000 of those positions being newly created jobs, according to Janco. In the last 3 months, more than 37,000 new jobs were created in that sector of the labor market.
“It is not clear at the moment how many of the positions eliminated at the large high-tech companies will be classified as jobs lost by the [US Bureau of Labor Statistics],” Janco’s report stated. “However, even if all of them are, there will still be a shortage of experienced IT pros.”
So how does Janco explain all those layoffs at tech companies?
‘Low-productivity’ workers deemed expendable
“Many of the ‘IT professionals’ let go by Twitter, Amazon, Facebook, and other big tech companies were not experienced IT professionals. They were, for lack of a better description, administrative ‘overhead’ or low-productivity workers,” Janco’s report stated. “Most will have a hard time finding jobs, just like the IT pros who were let go in the dot-com bust.”
Jack Gold, founder and principal analyst with J. Gold Associates, took issue with Janco’s assessment, saying it’s unlikely that companies laying off thousands of employees were getting rid of essentially unproductive workers.
“It’s pretty hard for me to believe that 50% of the Twitter workforce was dead wood,” Gold said. “Like all companies, there were probably some, but my suspicion is that they weren’t even trying to cull out those workers. When you have mass layoffs instead of just telling your managers to get rid of the 5%-10% of substandard workers, you are very likely throwing out the good with the bad.”
It is probably true that most of the workers let go were not traditional IT staffers like those you’d typically find working at an enterprise, Gold said. Many were likely programmers with a specialty. Others probably specialized in certain aspects of running a business like Twitter, Facebook, Amazon, and others, and so they might need some retraining to fit into a traditional IT role.
“But that’s not to say they aren’t skilled. Very likely with a bit of training they’d be fine,” Gold said, referring to their prospects for future employment.
Tech industry layoffs will continue
The focus in many IT organizations looking ahead to a possible recession will be to eliminate layers of management and increase the span of control for supervisors and managers while expanding engineering and coding positions, Janco said. That assessment aligns with one by Tony Lysak, CEO of The Software Institute.
Over the past two years, the dearth in tech talent due to ongoing digitization efforts and the Great Resignation saw enterprises fighting to bring aboard as many experienced tech workers as possible. But those workers were typically experienced in a specific technology, leaving organizations overly heavy with mid-level workers, compared to less experienced employees who can be upskilled over time to create a more sustainable workforce.
“That’s how you get that highly bloated middle — 60% to 80% of your tech workforce is highly paid engineers…, instead of having a more balanced workforce where 30% to 40% of workers have that zero- to two-year’s experience,” Lysak said.
Because of that bloat, layoff are expected to continue into 2023.
Digital services firm West Monroe recently polled about 500 US-based C-level and senior executives on their predictions for the coming year. About four in 10 respondents (41%) from a variety of industries said they are in the process of layoffs, have already made layoffs, or are considering layoffs in the next six months.
The survey also found that:
- More than 50% of tech industry respondents said they are either considering layoffs or have conducted layoffs.
- 64% of respondents said the hit to employee morale was the biggest challenge when considering layoffs.
- Nearly 60% of high-tech company respondents said hitting sales and growth targets is the biggest challenge facing their business in the next year.
Experienced IT pros still in demand
Even as layoffs continue, unemployment in the tech sector has remained at near-historic lows, hovering around 2.2%. That compares with the overall US unemployment rate of 3.7% as of October.
So far this year, tech industry employment has increased by 193,900 jobs, 28% higher than the same period in 2021, according to a jobs report from CompTIA, a nonprofit association for the IT industry and workforce.
“Tech hiring activity remains steady, but there are undoubtedly concerns of a slowing economy,” CompTIA CEO Tim Herbert said in a statement.
While November’s job data is not expected to be as robust as the same period a year earlier (when 73,600 jobs were added), the overall projection is that it will remain at a status quo level, with hiring continuing at the same rate as in the last two quarters.
“All-in-all, experienced IT Professionals will be in high demand,” Janco said. “Especially those who exhibit a strong work ethic and are results-oriented. Positions that will be in low demand will be administrative and non-line supervisors and managers.”
Gold agreed, noting that the shortage of tech workers right now — despite the layoffs happening at big-name firms — will ensure that most, if not all, will be rehired.
“Now, if the layoffs continue and/or we go into a recession, then all bets are off,” he added. “At that point it’s not a skills issue as much as just a massive oversupply of workers.”
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