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HomeIndiaGlobal technology – from hot to cold? - BR ResearchNews...

Global technology – from hot to cold? – BR ResearchNews WAALI

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The global tech industry was hit hard by layoffs in 2022, which have continued strong in 2023, with the likes of Google, Amazon, Microsoft, Yahoo, Zoom, Twitter, Spotify, Pinterest, and a dozen other giants drives the downsizing. They are joined by start-ups across all sectors, including technology start-ups. Those avoiding the layoff have implemented a hiring freeze. From large companies to small fintech companies, the US tech market accounts for over 35 percent of the world market, marking the worst start to a year in layoffs with over 180,000 jobs in January-February 2023.

How did the industry, with a great decade and one of the best pay scales, get all nervous and restless? Many reasons could explain the downsizing wave happening in tech companies.

First, the global economy is slipping into recession with inflation and interest rates rising after the COVID pandemic, affecting overall jobs in various labor markets. In other words, the mass tech layoffs are scaring the labor market and signaling a global recession.

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Second, the technology industry was following high expectations with the growth it encountered during the COVID pandemic. High expectations translated into over-hiring, over-paying, over-pricing, and overzealous business growth prospects. But as some of these expectations fell, the domino effect of deep headcounting across tech companies was not unusual.

Related to unrealistic growth expectations is also another factor; it has been seen that the technology companies let go of two key categories of employees: those who are not necessarily part of the key operations but the luxury benefits in the company’s offices such as famous chefs, masses of people, etc., and then’ those that could be replaced with cheaper, remote counterparts in developing countries with the same skill set. The importance and cost-effectiveness of remote workers from around the world emerged much more strongly during the pandemic, and tech companies, especially in the US and Europe, were seen hiring freelancers and remote workers on contracts short term they may not. require an equal or similar pay scale as a full-time permanent employee at the facility.

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What happens next depends on the direction of the global economy and the readjustment and spurring of the growth projections of the technology companies. Does this (or will this) affect tech jobs in countries like Pakistan? Although the global economic repercussions are having a ripple effect, and the ongoing economic slowdown is affecting all sectors, a significant layoff spree in the tech space is less likely compared to the industry’s immigrants, as most the companies, as well as freelance / remote workers, the potential to take advantage of the increase in business process outsourcing (BPO services) and other ICT product and service needs of the western technology giants.

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