Do recent tech layoffs signal the end of the boom?

The onset of the COVID pandemic in early 2020 ushered in a boom in technology as the world went into lockdowns and are forced to live and work remotely. Fast forward 24 months, the world is now faced with economic uncertainty which has led to many technology companies right sizing their workforce. Singapore is not spared with more layoffs at Shopee, three months after previous round of job cuts. This does raise the question - is the technology boom over? We don't think so.


COVID - The golden age for emerging technology companies that has passed

The global pandemic did two things for emerging technology companies. First the lockdowns forced individuals to spend more time online which increased the market size for tech companies overnight. Second the stimulus measures that countries pushed through their financial systems to prop up their economies resulted in extremely low interest rates, this allowed tech companies to supercharge their growth with cheap financing. The result was a massive shortage of tech talent as companies fought for and poached talent at any cost.


With the pandemic now in the rear-view mirror and inflation at historic highs, both trends are now going in reverse. Tech companies no longer have access to cheap financing to grow aggressively, and with the world reopening, people are spending less time online once again.


However, technology trends that COVID has brought about is here to stay

As emerging tech companies were busy growing as fast as they can, traditional businesses have had to deal with the lockdowns and business challenges during COVID and above that a rapidly rising cost for tech talent. COVID has brought to the forefront the importance of embracing digital technologies for all, but for many the traditional businesses, they just could not compete with the emerging tech companies for war for tech talent.


As the emerging tech companies shed some of their fat and ambitions, we see tech talent being snapped up by traditional businesses who have in place digital transformation plans, that they have been unable to pursue.


Tech talent will continue to be in demand and IT literacy key for the workforce of tomorrow

An article by CNA has confirmed that hiring trends continue to be focused around technology, with a high demand for talents in artificial intelligence (AI), machine learning, cyber security and e-commerce.


Singapore's IMDA has also concluded in a release dated 13 Oct that emerging tech trends that will influence high demand for skilled workers in the next 3 to 5 years include 5G and IoT; Cloud Computing; Artificial Intelligence (AI) and Analytics. These trends will lead to increasing demand for skills in at least three areas, namely (1) Software Engineering; (2) Cloud and Mobility; and (3) AI and analytics.

 

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