Workforce right-sizing during times of turbulence.
With multiple once-in-a-generation events occurring within the span of a few years, the tech sector is feeling the tension of conflicting market conditions. Pandemic-enforced work-from-home orders changed the marketplace, opening new opportunities for the tech sector.
To meet the increased demand for technology products and services, many firms rapidly expanded their workforces. As the world returns to some degree of normality, demand has changed. Public markets have been hit hard in 2022 as stock markets fell by more than 20% since the start of the year.
And the effects are now being felt in the private sector too. Some tech companies are reporting lower-than-expected results – and it’s not just those affected by pandemic-related constraints.
Geopolitical concerns have forced up everything from wholesale fuel and grain prices, and supply chain issues continue to drive up silicon prices, too. This has led to soaring inflation, forcing central banks to increase interest rates in a bid to bring the cost-of-living crisis and stock market rollercoaster under control. The reality is that purchasing power is down but costs are up, cooling the tech sector’s pandemic boom.
With less disposable income available to ordinary consumers, some sectors are feeling the pinch more than others. The convenience economy is set to become an early casualty for instance. Brands like Getir, Deliveroo, Zoom, and Robinhood all saw exponential growth during lockdown – but now demand is returning to normal, they are being forced to rightsize, shedding excess jobs in the process.
Unsurprisingly, tech companies are also trying to bring their costs under control. Employment offers are being withdrawn and the existing workforce is downsized, leaving prospective and current employees in a tough situation.
