In the last few months, we have heard continuously about big tech companies laying off employees and cutting costs. Is this going to be the trend for 2023? Will we have a recession caused by this? And what will happen with the women from a sector already dominated by men?
Over the last few years, we saw an increase in tech workers' demand with the peak seen in 2020, when everything moved to online. There were so many opportunities that we had a huge amount of people converting to the domain that promised everyone the stars.
When it comes to developing countries this was an effect much more visible than in the “old” money economies.
Places such as Ukraine, Moldova, India, China, Serbia, Hungary, Bulgaria, and Romania saw a big opportunity when it came to investors bringing money into the countries, especially on outsourcing labor.
One thing to note about any developing country is that this type of contract is beneficial for both parties, big companies get cheaper labor, and people get extra money compared to the rest of the fields. You can see it as the golden ticket for those 2 parties. There will be others that will lose in the globalization game and some communities will suffer, but tech is not different from production, which was always outsourced to Asia to reduce costs.
When the first Tech Giants started to let people go, it was rumored to be just a normal flow of laying off the ones hired during the pandemic when the demand increased. Now that the times have again changed, those people are not needed anymore, so the effect is common sense.
Yet as we are approaching the middle of the year, we have seen that the trend of letting people go is not decreasing but increasing. The end of the financial year only showed what most of us already thought, and with high inflation, we all see the outcome of our reckless spending during the past year.
Whether this will be the cause of an economic recession it’s still to be determined, but for sure it was a moment of awakening for many that thought was bulletproof.
I have been working in the IT field for more than 12 years, I have worked for big tech companies as well as small ones, collaborating with clients from all around the world. If there is one trend that is clear for 2023, that is budget and staff reduction and only maintenance for most of the products. Many of our clients added any new feature on hold and are on standby for what is going to happen.
From the market trends, many think that a recession is inevitable at this point, but few can tell what would be the overall impact on the people and communities.
Few details about Tech workers, when I went to college in 2009, 90% of the students that pursued computer engineering were males. In the companies that I worked for, 70% were males, even today, 10 years later we still see a majority of males in tech, especially in management positions.
Given the opportunity for upward mobility in class, there was a spike in the interest of women to join the engineering field, and for many, myself inclnded, was the ticket to financial independence and security. Now all of this is at risk.
As someone living in Romania, a country that made it to the 1st world countries list by chance and is among the last, I know the importance of the outsourcing business. Many women from tech were able to raise their kids as single moms, were able to buy a house and provide for themselves. The work-from-home policy helped with the development of medium and smaller cities, with many young people returning to their hometowns.
As someone who fought hard to bring awareness and bring more women in tech, I can see the instability of the market taking us back in time.
A crash in the IT sector will also have a domino effect on the services, the sector that has the most vulnerable people in it. Inflation already made an impact, but with this new threat, we’ve seen people even more cautious when it comes to spending.
If a tech crisis is to come, I do think that a recession will follow shortly. The global economy is very much connected nowadays and if one of the most stable domains of the last ~10 years is to suffer, all the rest will follow.
Given the circumstances, when layoffs are to be announced, my projection is that women will suffer more than men because companies will prefer the ones that can return to the office, a.k.a. no kids to take care of, and also given that man know better to sell and up-sell themselves.
I do hope that the Q2 and Q3 of 2023 will bring us more good news and that the layoffs from the US will stop. But we will only be able to know at the end of the year.
For now, I am optimistic and I hope the measures to better manage the budgets will help the domain to bounce back, but only time can tell.