Waking up to the following message: “Unfortunately, you are included in X% selected for layoff” is something you would never wish on anyone. However, in the US, More than 90 thousand workers The IT sector is affected by the 2022 tech company eviction. From Meta, Twitter, Netflix, Adobe and Cisco to Robinhood, UPat and Beyondmeat, companies of various sizes and verticals have announced layoffs. Companies in Central and Eastern Europe were also not immune to the economic downturn, and had to respond to rising costs. About 20% of Czech employers Especially in energy-dependent industries, they are preparing to be laid off by the end of the year.
In the year Understanding what will drive this particular tech company layoff in 2022 is important to determining what will happen to the tech ecosystem, and especially to Central and Eastern Europe, our neck of the woods.
To gather insights for this piece, The Recursive Talked to:
• Matei DumitrescuGeneral partner of Roca X VC, founder of Multi Speed programs, and member of the board of ANIS, the Association of Software and Services Industry Employers in Romania;
• Lavinia goesCo-Founder and Learning Architect of Offbeat, a platform where L&D professionals come together to accelerate their professional development through hands-on and knowledge sharing;
• Demosthenes CaponisChief Technology Officer at MetricaA software company that provides operational data for blockchain networks.
Why are we seeing a wave of layoffs at the growing tech company?
Experts I interviewed agree that this is largely the result of over-recruitment in recent years.
“The past few years have seen an unprecedented influx of digital products, services, and most importantly, those who create them, for a variety of reasons, including the rise of remote work, which has transformed the way certain high-demand industries operate. By accelerating the pace of digitization, most of the jobs we see at the end of 2022 are the result of over-hiring by companies in previous years., It is not a general trend,” says Demosthenes Kaponis.
In addition, Lavinia Mehedintu added, “Companies are being careful with their budgets for months and years to come.”
Also, layoffs don’t affect all departments at tech companies equally. For example, sales is more influenced than IT.
“At the beginning of October interview.io He conducted an analysis of data on layoffs.io, which tracks layoffs around the world. Their conclusion was that while yes, engineers were out of a job, it wasn’t the business functions that were most affected by far. Of all layoffs in a company, people in the IT department account for only 5%. For comparison, layoffs in the sales department are 20% of the total.
How are layoffs affecting tech talent in Central and Eastern Europe?
Matei Dumitrescu told Recursive that “CEE countries have seen accelerated economic growth in the last few years and we also have a huge labor shortage.”
This does not mean that there are not and will not be any layoffs in IT companies in the region. However, historical data suggests a rapidly growing and dynamic IT market, a skewed balance of supply and demand that will continue to drive demand for IT specialists in the coming years.
Let’s take Romania as an example. A study done by ANIS Romania The local IT market continues to grow, with an increase of €1.1 billion in the post-pandemic years (2020-2021). The annual growth rate of the IT sector is three times higher, 15-17% per year, compared to other industries in Romania.
“According to studies by ANIS, we currently have 147,000 employees in IT services, and this number is increasing by approximately 10,000 people every year. However, the demand for specialists is almost double. The lack of specialists is the main obstacle to the accelerated growth of the industry,” explains Matei Dumitrescu.
Elsewhere in Bulgaria, the resource sector It accounted for 2.1% of the total revenue generated by private companies in 2021; AIBEST, creative association, business excellence, services and technology. The operating income of companies will exceed 8.9 billion euros in 2025, double that of 2021. .
Meanwhile, Bulgarian employers also pointed to a skills shortage as one of the most pressing risks for the industry, with demand for highly skilled workers outstripping supply.
Demosthenes Kaponis added: “There will continue to be a critical need and shortage of professionals who can build the products and services of the future, and the market today is more volatile than before the pandemic.”
Despite the pessimistic look of tech cutbacks and looming signs of an economic downturn, the demand for IT careers is expected to remain high.
“I think people are still jumping into IT from other departments and starting IT jobs as students. After all, it’s still one of the most in-demand industries in the world, changing so fast and with opportunities around every corner. “So while we may see a natural decline in demand for some roles and technologies, as Web3 chat continues to grow, new technology will open up new employment markets,” she says.
For those considering opportunities in Central and Eastern Europe, a few are worth mentioning. Benefits of working in countries in the region:
- Competitive cost of living compared to Western countries – up to 50% lower
- Abundant co-working spaces in major cities
- Stable and fast internet connection in major cities
- Rich history and culture, including the presence of different ethnic groups
- A variety of landscapes, from high mountains to sandy beaches, and a climate of four seasons
