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WHAT ARE THE FACTS BEHIND GLOBAL TECH LAYOFFS?

The wave of layoffs is a topic that attracts the world's attention and is one of the most significant global HR changes globally in recent years. Specifically, this tech layoff occurs in the technology industry, where IT employees work the most. This issue causes many questions about the out-trend of the IT industry. So what are the facts behind the global tech layoff wave?


Let's find out with JT1!


I/ REASONS FOR THE LAYOFF WAVE

1. LONG-TERM EFFECTS OF COVID

One of the biggest reasons leading to mass layoffs is the excess staff after the pandemic. Specifically, an unusual increase in traffic and revenue during the quarantine was caused by the high-demanded consumers staying at home. The unusual increase has forced tech enterprises to hire more than necessary to meet the increased workload and ensure the user experience.


But when the world returned to regular days, the need to use online services also decreased a little; the workload dropped, and the number of employees needed to handle daily tasks was also less. From the point of view of the business owner, staff cutback to reduce costs is a must thing to do.


2. TREND OF OUTSOURCING FIRMS

Facing the brink of recession, preserving business cash flow is an excellent risk management method. According to Glassdoor, software engineers will have an average salary ranging from $ 78,000 to $ 152,000 for candidates with less than one year of experience. The more years of experience they have, the higher income they can earn. Therefore, recruiting Tech employees will often consume many costs for the business.

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Figure 1. The average income of software engineer - Glassdoor

Meanwhile, outsourcing services allow companies to hire Tech employees from a third party and reduce 30-40% of costs compared to building and maintaining their staff, especially compared to hiring Western employees. Asia supplies the world's most reasonable tech talents with high quality when it is 30% lower than the common.


3. THE CYCLE OF RISE AND FALL IN THE STARTUPS

Startups are known to be more innovative and growth-oriented than other types of businesses. However, it is undeniable that operating a startup is challenging because they often choose to follow a new business idea or a new type of technology, which is risky and requires much time for the market to adapt.


In the basic development process of a startup (orientation, challenge, integration, and development), the challenge phase will force these businesses to face many difficulties. As a result, there are two ways: Overcome challenges and thrive or fail.


This failure will lead the employees to job loss and force them to start new careers in passive positions. Especially in the past couple of years, when a series of attractive new technologies have been developed, stimulating the desire of startups to conquer but have yet to meet the market's needs or are still too fresh for consumer acceptance, leading to the collapse of a large number of startups.


However, the failure of startups still does not affect the talent market because other startups will still rise and handle those employees. Ultimately, we conclude that this is a staffing cycle between the rise and fall of startups.


4. ECONOMIC RECESSION AFFECTS

HR has faced many risks when the Big Techs have implemented staff reduction in a short time. Specifically, last weekend, Twitter also caused bewilderment when it announced the layoff of half of its employees. Meta - the holding company of Facebook, also laid off 11,000 employees. Or Lyft, a rideshare app, also laid off 13% of its workforce. Amazon also laid off 3% of employees, equivalent to 10,000 employees. In early November, three sources revealed to Business Insider that many departments at Apple announced that they would not recruit new employees shortly.


From the economic fluctuations, businesses' strategies are also significantly affected. For instance, Amazon - Leading Global e-commerce company, year-end and annual festive seasons are times when shopping demand is high, requiring this business to increase the workload and personnel to ensure service quality; this year's situation goes in the opposite direction. The impact of the global economic crisis, war, and inflation caused the shopping rate to decrease, leading to this business having to lay off employees to ensure its ability to operate.


This staff reduction is mainly due to fear and prevention of financial risks for companies when the economic situation is not very positive at the end of this year. Still, Tech is not the only department that suffers from personnel problems, and this reduction occurs in every department.


5. MULTI-TASK REQUIREMENTS

One of the recent popular recruitment trends is that businesses prioritize candidates who can multi-task. This both helps enterprises cut costs and avoid wasting talents, and at the same time, helps to streamline the human resources apparatus - easier to manage and coordinate.


Similar to today's young talents, especially Gen Z, who are eager to discover new aspects of work, tend to avoid settling down with a stereotypical job and pay more attention to a multi-task career with diverse experiences to satisfy their self-development purpose.


With all the factors listed above, Multi-task employee recruitment is currently a prominent trend in the HR industry, especially in the IT field. It is also why candidates are unpaid for this requirement to be replaced. However, this can be overcome entirely by candidates upgrading themselves to keep up with the needs and trends of the HR market and employers.


II/ DOES IT AFFECT THE TECH HR MARKET?

According to the Hanoi Employment Service Center (Hanoi Department of Labour, Invalids and Social Affairs), in the situation of the COVID-19 epidemic, businesses must invest in technology platforms, and human resource needs have never cooled down. The technology field still tends to recruit large and often, in some positions that require high-quality employees, such as software engineers and programmers. However, many businesses also face recruitment challenges, so they must prepare long-term recruitment plans to find potential candidates.

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Figure 2. Recruitment demand chart in Vietnam - According to the Hanoi Employment Service Center

As for the unemployed people, Vex has commented: "Other organizations will soon offer them when having experience working at big corporations." Kathy Zhu, a co-founder of startup Streamline AI, said: "Right now, the HR market is full of talented people looking for work because of the layoffs. A few years ago, it was impossible to attract these people like that." In fact, this reduction in personnel indirectly "shares the talent pool" of big corporations with smaller companies and helps them have more opportunities to develop.


As the topic of layoffs became widespread, some sources misled people about the nature of the incident. This event originates from large technology corporations, but the truth is that this personnel purge mostly happens in other departments, such as retail and warehousing, and more and will rarely be. For example, the laid-off employees at Amazon will mainly come from the product and equipment department. What impact does it have on the IT department - the core department of technology companies?


We have entered Industry 4.0 when all activities in life, to live, stay or work, take advantage of technological achievements to help people save time and labor. Moreover, technology has entered high-level fields such as science, medicine, and politics and is essential in ensuring world security. Considering the contribution of Digital transformation during the Covid-19 pandemic as a crucial role in connecting people in the Social Distancing stage, we believe that now is the time for us to adopt a new era when our lives move from offline to online.


The IT industry will never be out-trended when people increasingly depend on technology. Its development will require a larger and larger IT human resource to orient and follow the development closely.


III/ CONCLUSIONS:

This tech layoff is temporary and is intended to screen out unsuitable or over-staffed personnel. At the same time, find highly qualified personnel and reduce costs while ensuring the quality of work for the business.

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