With the title of the article, you may have got some idea about what I am going to discuss here. Well, if you are a job aspirant, you can relate with the hiring slowdown. Many professionals in the IT industry are going through the phase where the demand is far less than the supply. How long do you think it would last? When the hirings in IT would begin? What would be the most important thing job aspirants should do to get jobs in this market? These are some of the most common questions that aspirants like you may have right now. Let me try to throw some light on this crucial topic. Hope you would find it insightful.
Reasons for layoffs or hiring slowdown in IT industry
Most organizations had increased their workforce multifolds during the COVID times. This was mainly due to the fact that the IT industry saw a good number of projects that require hiring a sizeable workforce. This led to IT companies hire a lot more IT professionals than they actually needed. Many economic factors are responsible for this growth then, including governments pumping huge inflows of money into the economy, work from home setup, the desire to stay ahead of the competition, etc. Remote work setup was a win-win situation for both employers and employees as they could save on various costs associated with renting workplaces, management costs (e,g., electricity, cafeterias, and househelp), commuting costs, etc. As people were earning well and have a lot to spend, this caused high inflation in the economy.
Soon after a boom in the IT industry, we saw a phase where the governments have increased the interest rates to curb inflation. Owing to the increase in the interest rates accross the world, organizations started to downsize their workforce by laying off professionals who were either costly or not essential to their organizational growth. Clients started to put their projects on hold due to high interest rates on their borrowings, resulting in low demand for IT professionals. Many IT professionals have lost their jobs since 2022 and still many are going through this phase. High interest rates due to inflation is just one cause of this hiring slowdown in the IT industry.
The second reason for this slowdown is the advent of AI. AI technology has become popular beyond anyone’s imagination. AI tools like ChatGPT, Synthesia, etc., have revolutionized most tasks in the industry. These tools have the potential to reduce the headcount of the workforce if not replace them. Organizations are still evaluating the areas where they can use AI to improve productivity by automating simple tasks and reduce the headcount to improve profit margins. We will see more developments in this area when AI use cases are thoroughly evaluated and approved.
How long the hiring slowdown or layoffs will last?
Hiring slowdown or layoffs are not new in the IT industry. We saw similar situations in the past such as in 2008 and 2014. It is a part of the restructuring the IT industry for various reasons. Coming to the present situation, layoffs started in 2022 and are ongoing. Experts believe that 2024 would also be no exception. When we talk about layoffs or hiring slowdown, it does not mean that IT professionals are not getting any jobs. It is just that the demand is less than the supply so only experienced or skilled individuals are getting the opportunities. Freshers are suffering the most as they lack the expertise required for executing projects.
This situation is poised to improve once the interest rate cuts are announced, which is expected to happen this year. This is because most clients can borrow money for new projects that were on hold at cheaper rates. However, it may take some years for the IT industry for its revival. Most industry experts are extremely bullish for 2025. While going through this tough time, you must not give up or lose hope. Instead, try to utilize the time for upskilling and learning new technologies that are in demand.
In-demand skills for getting high-paying jobs
So far I have discussed the factors responsbile for hiring slowdown in the IT industry along with the possible timeline when this situation can improve. Let us disucss some skills that are in high demand and are expected to be so in the future. While software development would not lose its shine, it may be transformed to some extent with the help of AI. Skills other than software development that can help you stay ahead of the competition include
Data Analysis
Data analysis has been around for years and is expected to be one of the most sought-after skills in the IT industry. Data analysts help IT organizations visualize data, extract useful information, and make informed decisions. If you learn data analysis, you get a chance to work on various roles, such as Data Analyst, Data Engineer, Data Scientist, etc.
Cybersecurity
As more and more IT organizations are undergoing digital transformation, the demand for information security is increasing. Organizations that have poor cybersecurity tend to suffer the most by cyberattacks. Cybersecurity professionals helps IT organizations protect against potential cyber threats by implementing security measures that safeguard their information systems. If you acquire cybersecurity skills, you can find exciting cybersecurity opportunities, such as Cybersecurity Analyst, Ethical Hacker, CISO, etc.
Cloud computing
Most IT orgnaizations are adopting cloud computing for better infrastructure management and improved productivity and profits. Cloud professionals help businesses migrate their infrastructure to the cloud and manage it effectively. Cloud computing skills can help you stay in the limelight and make the most of this opportunity. If you learn cloud computing, you can work as Cloud Engineer, Cloud Architect, Cloud Security Engineer, etc.
DevOps
DevOps has gained so much popularity that it became the most high-paying job in the IT industry. DevOps professionals help IT organizations simplify the development and deployment process of software, which eliminates issues related to software performance. If you learn and master DevOps, you can explore exciting DevOps career roles, such as DevOps Engineer, DevSecOps Engineer, etc.
AI/ML
Learning AI/ML skills will help you stay in demand for years. AI/ML professionals create, develop, implement, and improve AI solutions to meet business requirements. By working on large datasets, Machine learning algorithms, and models, they extract meaningful insights, automate tasks, and make predictions using the data. Some of the roles that you can take up by learning AI/ML include ML Engineer, Data Scientist, AI Data Analyst, Applied ML Engineer, etc.
Conclusion
In essence, layoffs and hiring slowdown in the IT industry is a temporary phase that will not last long. As soon as the economy becomes stable, more job opportunities will come and layoffs will end. If you are struggling to get a job now, utilize this time to prepare for the upcoming opportunities so that you are not left behind when things become normal. Try to learn new technologies and AI tools to improve your skills and productivity. Besides the trending skills discussed above, focus on other important skills, including soft skills, time management, the ability to handle hard situations, etc. Most importantly never forget to work smar and stay positive to lead a happy and prosperous life.