Even as layoffs continue, IT professionals remain in high demand

While high-profile layoffs continue in the technology sector, demand for experienced IT professionals remains high, according to a new report from IT employment consultancy Zanco Associates.

According to Janco’s report, more than 100,000 jobs remain unfilled for experienced IT professionals in the United States. These job roles include coders, application design specialists, security and compliance specialists, and blockchain/e-commerce engineers at all levels.

Janco Associates

Still, the Zanco report noted, the total number of unfilled jobs for IT professionals fell from 250,000 to 200,000 over the past six months.

At the same time, approximately 100,000 jobs are filled each month, including 12,000 to 14,000 newly created jobs, according to Janco. In the last 3 months, more than 37 thousand new jobs have been created in that sector of the labor market.

Janco Associates

“It is not clear at this point how many positions eliminated at large high-tech firms would be classified as job losses. [US Bureau of Labor Statistics]”Janco’s report said. “However, even with all that, there will still be a shortage of experienced IT professionals.”

So how does Janko explain all those layoffs at tech companies?

‘Low-productivity’ workers are considered expendable

“Many of the ‘IT professionals’ at 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,” Zanco’s report said. “Most will have a hard time finding jobs, just like the IT professionals who were let go in the dot-com bust.”

Jack Gold, founder and chief analyst at Jay Gold Associates, took issue with Zanco’s valuation, saying it’s unlikely that companies laying off thousands of employees are essentially getting rid of unproductive workers.

“It’s pretty hard for me to believe that 50% of Twitter’s staff was dead wood,” Gold said. “Like all companies, there probably were some, but I suspect they didn’t even try to get rid of those workers. When you lay off massively instead of asking your managers to get rid of 5%-10% of low-quality workers, you’re most likely throwing the good in with the bad. Giving.”

It’s probably true that most of the workers being let go weren’t the traditional IT workers you’d typically find working in an enterprise, Gould said. Many were probably programmers with a specialty. Others likely specialize in specific aspects of running a business, such as Twitter, Facebook, Amazon and others, and so may require some retraining to fit into a traditional IT role.

“But that doesn’t mean they’re not skilled. They’ll probably be better with a little training,” Gould said, referring to future employment prospects.

Tech industry layoffs will continue

The focus of many IT organizations looking at a potential recession is to eliminate management layers and expand the control time of supervisors and managers while expanding engineering and coding positions, Zanko said. That assessment aligns with one from Software Institute CEO Tony Lysack.

Over the past two years, ongoing digitization efforts and large layoffs have seen tech talent shortages as enterprises struggle to bring in as many experienced tech workers as possible. But those workers were typically experienced in a particular technology, leaving firms overly burdened with mid-level workers, rather than less experienced workers who could build a more sustainable workforce over time.

“That way you get a very bloated middle — 60% to 80% of your technical workforce is highly paid engineers…, rather than having a more balanced workforce where 30% to 40% of workers have zero to two years of experience,” Lisak said.

Because of that swelling, layoffs are expected to continue through 2023.

Digital services firm West Monroe recently surveyed nearly 500 US-based C-level and senior executives on their predictions for the coming year. Four in 10 respondents (41%) across industries say they are in the process of laying off, have already laid off, or are considering laying off in the next six months.

The survey also found that:

  • More than 50% of tech industry respondents said they were either considering layoffs or had 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 that achieving sales and growth targets is their biggest business challenge in the year ahead.

Experienced IT professionals are still in demand

Despite continued layoffs, unemployment in the tech sector remains at a historic low of around 2.2%. This compares to an overall US unemployment rate of 3.7% as of October.

So far this year, technology industry employment has grown by 193,900 jobs, up 28% from the same period in 2021, according to a job report by CompTIA, a nonprofit organization for the IT industry and workforce.

“Tech hiring activity remains steady, but there are undoubtedly concerns about a slowing economy,” CompTIA CEO Tim Herbert said in a statement.

While November’s jobs data is not expected to be as strong as the same period a year ago (when 73,600 jobs were added), the overall estimate is that it will remain a status quo, with hiring continuing at the same rate as the last two quarters.

“All in all, experienced IT professionals will be in high demand,” Janko said. “Especially those who demonstrate a strong work ethic and are results-oriented. The positions that will be least in demand will be administrative and non-line supervisors and managers.

Gould agreed, noting that the shortage of tech workers right now — despite layoffs at big-name firms — will ensure that most, if not all, of them will be rehired.

“Now, if layoffs continue and/or we go into recession, all bets are off,” he added. “At that point it’s not an efficiency issue as much as a huge oversupply of workers.”

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