The beginning of this year marked a gigantic blow to the tech sector with hundreds of thousands of high-level professionals losing their jobs overnight. But is the tech recession finally over? In the following article, we will be discussing these topics:
- What is the tech recession, and what caused it?
- Are tech lay-offs in decline and what does that mean?
- What does the future hold for the technological field?
The 2023 tech recession, explained
The start of 2023 saw a colossal number of tech layoffs. Back in January, some of the biggest tech companies in the world—including the likes of Amazon, Google, and Microsoft—began making widespread cuts. In a devastating start to the year, in that first month, it was recorded more than 100,000 tech professionals had lost their jobs.
While the mass tech job cuts are troubling, especially for those working in the sector, there is a logical reason for the shift. During the pandemic, the tech sector enjoyed a massive boom. With the majority of the population locked down, consumers turned to virtual and cloud-based services for their entertainment. That meant more content streaming, video calling, and, of course, online shopping. The surge in customers led to vastly increased profits which, in turn, led to tech companies hiring countless new workers.
Unfortunately, what goes up must eventually come down. That’s where the tech recession slides neatly into view. While January saw by far the biggest job fallouts, the following four months also recorded high levels of tech lay-offs. Yes, between February and May 2023, a further 189,674 tech jobs were lost in total. The future was looking anything but bright.
However, June this year saw the tech recession trend starting to slow down. In both June and July, there were just under 15,000 tech layoffs. August saw a similarly low number with a little under 19,000 job losses. Now that we’re in September, the trend appears to have continued with the tech job cuts remaining low over the past few weeks.
Does this mark the end of the tech job recession?
The short answer is yes… probably. According to the latest statistics, tech job cuts are slowing down across the board. The clear-cut conclusion is that the sector is due to bounce back as we move toward the end of the year. The decline in tech lay-offs is a positive sign and, should it continue in the coming months, indicates a healthy recovery.
There are two factors we need to look into here. First of all, most of the major tech companies have already made their round of redundancies. That means that there are fewer businesses left that are ready to pull the trigger on existing job roles.
However, there’s another rogue element at play. The rise of AI—a market projected to be worth $407 billion by 2027—is creating and saving existing tech positions. As more and more businesses adopt AI technology, it’s certain to entirely transform the sector.
Key takeaways
- The first five months of 2023 saw massive tech lay-offs in what experts called “the tech recession”.
- This trend is a stark comparison to the huge technological boom that we enjoyed during the height of the pandemic.
- While the start of the year was bleak, stats show that tech job cuts are in decline.
- The tech recession is ending with new job opportunities on the horizon soon! Why not take this opportunity to spruce up your resume and start applying?
