Tech sector believes worst is over for job losses

It was not a good year for tech jobs. “Right-sizing.” “Tough choices.” “Business priorities.” All different ways of saying the same thing: tech companies were shedding jobs in 2023 and at a rate that was alarming industry watchers.

The year got off to a bad start with Google’s announcement in January that it would cut up to 12,000 jobs globally. The impact on the Irish workforce was announced a few weeks later, with Google confirming in February that it would cut 240 from the main Irish subsidiary’s workforce, with a handful lost at the cloud division. The majority of the jobs went from its sales and support functions, with a further 80 going in tech and engineering.

Then Meta announced a second round of cuts, ones that were sure to affect the Irish staff more significantly than previous cuts had done; almost 500 jobs were to go, which equated to about 18 per cent of the workforce here.

Amazon cut a handful of jobs, as did LinkedIn. Microsoft also trimmed its headcount, along with Salesforce and PayPal.

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It makes for grim reading. The most recent figures from IDA Ireland show the number of people employed at its client companies in the Republic fell for the first time in at least 10 years, fuelled by cuts across the tech sector. Although IDA-supported companies added almost 17,000 jobs throughout the year, they cut almost 18,000 roles.

Doom and gloom is also evident among some of the employers too. According to the latest Manpower Employment Outlook Survey published in mid-December, confidence in hiring in the IT sector has slumped over the past two years and remains low.

More companies in tech expect to let more workers go than anticipated in early 2024, Manpower said. But the job losses are more likely to be in human resources (HR) and other support roles. That means tech roles are still in demand, and with the majority of companies in the sector saying they struggle to recruit for the more specialist technical skills they require, demand in these areas is likely to continue.

[ Tech sector employers anticipate further job losses in early 2024 ]

[ Rightsizing in tech: A pandemic anomaly or longer-term correction? ]

Meta Ireland’s chief, Anne O’Leary, said the rounds of job cuts it had suffered had left the company leaner and more efficient.

“We’re fit for the future now,” she told The Irish Times in an interview a few months ago. “We’re back to pre-Covid levels. My view would be: the business is performing well. Revenue growth is growing and we’re now an organisation that is focused on the priorities: AI, product development,” she said.

That could leave future opportunities for hiring in those sectors too. However, some of the success of the company is wholly out of its control, dependent as it is on the macroeconomic situation.

“As was said in the earnings, we are fit for the future. There was talk about the macroeconomic situation and things that may happen that can set a business back,” said O’Leary.

“We’re fit, we’re scaled, we’re leaner to deliver on the strategy and deliver on the vision to bring people back together, to build community, to focus on a better experience for our users and for advertisers that depend on our platforms to grow their business.”

But things aren’t quite as bad as they may first seem. According to data from IrishJobs, the information technology (IT) sector is now on a par with pre-pandemic levels in 2019. And the sector remains strong,” said Sam Dooley, country director of the Stepstone Group for Ireland, which includes IrishJobs.

The company’s jobs index, which tracks listings on the IrishJobs site, indicates a normalising jobs market, with vacancies softening in many sectors now that the post-Covid hiring surge has abated. But there are still jobs to be found in tech – it just might not be quite the role you expected.

“Even with the readjustment experienced across the year, the IT sector continues to be one of the largest sources of professional vacancies in the jobs market. Hiring in the sector remains strong, with IT jobs accounting for 6 per cent of all job advertised in 2023, compared with 7 per cent in 2022,” said Dooley.

“Demand remains resilient for a wide range of roles in the IT sector from automation engineers to QA specialists and software engineers. Significant increases in demand were evident for data roles, specifically lead data architects and data security officers. This trend indicates a rising demand for data-management skills as more organisations develop AI and big-data capabilities.”

[ The tech downturn, what downturn? ]

The impact of artificial intelligence could be a double-edged sword for jobs in the sector. While it is being pitched as a potential replacement and augmentation for basic coding work – see AWS’s recently-announced CodeWhisperer, for example, which generates code suggestions based on your existing code and comments – it is also causing some concerns that jobs will be eliminated across a range of sectors as AI becomes more powerful. In an ideal world, that would free up human staff for more interesting work, but that will require upskilling.

What’s in store for 2024?

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Sue Duke, vice-president at LinkedIn Ireland, said there had been a noticeable increase in interest in AI skills on the platform. Through LinkedIn Learning, the company offers a range of training courses in this space, ranging from introductions to the technology to more advanced courses in how to leverage AI in different fields. Alongside that, it also tracks trends in employment, and how members are emphasising their newly-acquired skills on LinkedIn profiles.

“We’re really seeing a big surge in demand as members look to upskill in this space,” she said.

Dooley sees the influence of AI as a potential game-changer for the tech industry. Not only will it impact the type of tech roles employers hire for, Dooley said, it will also influence the hiring process.

“As more jobs candidates are using large-language tools like ChatGPT to complete recruitment tasks, it will be important for employers in the IT sector to adapt their recruitment processes. An increased focus on human-led evaluation can enable companies in the IT sector, and others, to get a more accurate sense of candidate performance earlier in the recruitment process,” Dooley said.

Looking ahead for the year, it is likely that the labour market will remain tight, experts say. But the large-scale losses of 2023 are not expected to be replicated. That will depend to a certain extent on the macroeconomic environment and how companies have prepared themselves.

“As a tight labour market continues into 2024, a focus on skills-based hiring will also be of particular importance to companies in the IT sector as they look to secure potential talent,” said Dooley.

“By focusing on screening for talent that is capable of evolving and adapting to new technologies like AI, not just education or years of experience, they can better ensure their workforce is fit for the future.”