KUALA LUMPUR (Nov 21): US tech industry lay-offs have accelerated over the last couple of months, but the industry is still in a strong position to weather a recession.

Crunchbase, which tracks trends, investments and news of global companies from start-ups to the Fortune 1000, said that during the first week of November, at least 6,473 tech workers in the US were laid off — an over 600% increase from the 910 who lost their jobs the week before.

In a report last Friday (Nov 18), it said there were more than 7,000 reported US tech sector lay-offs.  

Crunchbase said the job market whiplash comes after 2021’s economy brought about rivers of venture funding, a fertile stock market, and rocketing valuations that made the largest companies collect tech talent left and right to stockpile skilled workers.

It said in 2022, markets became frosty, and some companies admitted they hired too many people, too fast.

The firm said this is a correction to last year’s hiring spree.

It said while tech workers are going to have to adjust to a new reality — one that comes with lower salaries and fewer benefits — the tech industry is still poised to be one of the better-off workforces with the US economy in flux.

Crunchbase however said tech companies not beholden to ad spend are largely doing okay.

It said this is always the case when the economy goes through a dramatic shift, as some industries thrive while others go bottom-up.

During the pandemic, the travel industry buckled amid social distancing guidelines while telehealth and e-commerce blossomed, it said.

In fact, it said the overall tech market is facing a shortage of tech workers, the same shortage that drove large companies to stockpile top-tier talent in 2021.

Crunchbase said June ended with 554,573 open tech jobs.

It said for comparison, that would mean for every person who has been laid off so far in 2022, there are around eight available postings — more if people who were laid off earlier in the year have already found new employment.

It said roles including cybersecurity, cloud operations, and data science and analytics continue to be in demand as companies operate remote or hybrid workplaces and require distributed and secure networks.

It said cloud computing roles grew 162% between the first half of 2021 and the first half of 2022, while increases were seen in data-related roles that use languages like R (111%), Go (131%) and Typescript (142%).

Crunchbase said wages skyrocketed in the last couple of years amid the labour shortage.

It said in 2019 and 2020, the average tech salary saw a 3.6% increase.

It said in 2020 and 2021, it spiked again by nearly 7%.

The firm said companies had to offer competitive salaries and benefits packages to keep and retain valuable employees who could otherwise be poached.

However, it said that number is likely to come down, as companies can no longer afford to hire new talent at a premium, and jobseekers might find their new company pays less than their old one.

That means tech workers who jump from one company to another are unlikely to see the kinds of salaries and bonuses they saw in previous years, it said.