As the technology industry navigates a period of high-profile layoffs, the broader job market tells a different story. While tech-related job postings have declined by 25% from pre-pandemic levels, the overall hiring landscape remains relatively healthy. Out of the 47 total sectors tracked by Indeed, job postings as of February 16, 2024, were down compared to pre-pandemic levels in only 8 sectors – the level of opportunities in the remaining 39 sectors is still above pre-pandemic baselines.
The national job market has been sending conflicting messages recently, with official measures including the monthly jobs report continuing to paint a fairly rosy picture of low layoffs, strong wage growth, and sustained employment growth, even as a slew of tech and media companies marked the start of 2024 by announcing thousands of high-profile layoffs. However, the tech and professional sectors actually represent a smaller share of the market than their outsized cultural influence and media presence would suggest. Hiring demand in a majority of sectors remains strong compared to pre-pandemic norms, especially for in-person work.
While tech-related job postings, in sectors including Software Development, IT Operations & Helpdesk, and Information Design & Documentation, have fallen drastically from their peak over roughly the same period, declining below pre-pandemic levels by May 2023, and standing 25% below their pre-pandemic level as of February 16, 2024, the overall job market remains relatively healthy. This is reflected in the fact that job postings in sectors with a high share of remote-eligible roles have also declined, falling to 8% below pre-pandemic baselines, while demand for in-person sectors remains above pre-pandemic norms.
- The technology industry has faced several challenges over the past two years, including high inflation, elevated interest rates, and considerable macroeconomic and global uncertainties, which have contributed to a softening of consumer spending, lower product demand, falling market capitalizations, and workforce reductions.
- Despite the high-profile tech layoffs, the overall job market remains relatively healthy, with job postings in a majority of sectors still above pre-pandemic levels as of February 2024.
- The tech and professional sectors actually represent a smaller share of the market than their outsized cultural influence and media presence would suggest, with hiring demand in a majority of sectors remaining strong compared to pre-pandemic norms, especially for in-person work.
- While tech-related job postings have declined by 25% from pre-pandemic levels, the level of opportunities in 39 out of the 47 total sectors tracked by Indeed is still above pre-pandemic baselines.
- Job postings in sectors with a high share of remote-eligible roles have declined, falling to 8% below pre-pandemic baselines, indicating a waning of remote work opportunities, while in-person work remains in demand.
Tech Job Market Defies Headwinds and Layoffs
While tech-related job postings, in sectors including Software Development, IT Operations & Helpdesk, and Information Design & Documentation, have fallen drastically from their peak over roughly the same period, declining below pre-pandemic levels by May 2023, and standing 25% below their pre-pandemic level as of Feb. 16, 2024, the overall tech job market remains relatively healthy. Out of the 47 total sectors tracked by Indeed, job postings as of Feb. 16 were down compared to pre-pandemic levels in only 8 sectors — the level of opportunities in the remaining 39 sectors is still above pre-pandemic baselines.
Resilient Demand Across Most Sectors
The tech industry hiring landscape has remained surprisingly robust, with strong demand for software developers jobs and IT jobs outlook across a majority of sectors. This resilience defies the recent high-profile tech layoffs that have grabbed headlines, underscoring the broader strength of the tech hiring trends in the U.S. job market.
Remote Work Opportunities Wane
Job postings in sectors with the highest share of remote-eligible roles were down 8% from pre-pandemic levels as of Feb. 16, indicating that remote work opportunities have waned. However, in-person work remains in demand, with postings in sectors with low or medium shares of remote-eligible roles each up 27% from their pre-pandemic baselines as of Feb. 16.
Market Analysis & Growth
| Sector | Change in Job Postings (vs. Pre-Pandemic) |
|---|---|
| Software Development | -25% |
| IT Operations & Helpdesk | -25% |
| Information Design & Documentation | -25% |
| Sectors with Highest Remote Work Eligibility | -8% |
| Sectors with Low/Medium Remote Work Eligibility | +27% |
Market Analysis: The Growth of Hiring in the Technology Industry in 2024
The technology industry is poised for a resurgence in 2024, as enterprise spending on software and IT services—particularly artificial intelligence, cloud computing, and cybersecurity technology—is expected to enable significant growth in the tech market over the coming year. The technology industry hiring and tech job market growth are expected to benefit from this increased investment, as companies seek to build up their capabilities in these critical areas.
Cloud, AI, and Cybersecurity Drive Tech Spending
The rise of cloud computing jobs, AI jobs, and cybersecurity jobs is fueling much of the projected growth in the technology industry. As organizations continue to migrate their operations to the cloud and invest in advanced analytics and security solutions, the demand for skilled professionals in these domains is expected to surge. This trend is further reinforced by the increasing prevalence of globalization in tech, which has heightened the need for robust, resilient technology infrastructure and security measures.
Balancing Globalization and Self-Reliance
The worldwide, interconnected nature of the tech industry heightens the risk of disruptions from geopolitical unrest, supply chain volatility, raw material shortages, and new regulations and policies. In response, tech companies are urged to evaluate where manufacturing happens, improve the transparency and resiliency of their supply chains, and prepare proactively for future systemic risks. They are also advised to use technology to streamline business processes, rely more on intelligent automation, reduce tech debt by implementing leading practices for software development, and modernize legacy architectures by migrating to cloud resources and anything-as-a-software (XaaS) services. By striking a balance between globalization and self-reliance, the tech industry can position itself for a robust and resilient future.
The technology industry has faced numerous challenges over the past two years, including high inflation, elevated interest rates, and considerable macroeconomic and global uncertainties. These factors have contributed to a softening of consumer spending, lower product demand, falling market capitalizations, and workforce reductions. However, there are now signs of hope that a tech comeback may be on the horizon.
Market Analysis & Growth
Economists have lowered their assessments of recession risk, and analysts are optimistic that the tech sector could return to modest growth in 2024. As the tech industry outlook remains uncertain, it is crucial for tech leaders to refocus on innovation and growth. By leveraging technologies such as cloud computing, AI, and cybersecurity, they can drive enterprise spending and enable market expansion.
To position the tech job market for a robust and resilient future, tech companies must strike a balance between globalization and self-reliance. This will involve evaluating their manufacturing locations, improving supply chain transparency and resiliency, and preparing proactively for future systemic risks. Additionally, by setting the stage for growth with generative AI and modernizing legacy architectures, the technology hiring trends can be poised for a positive trajectory in the years to come.
Source Links
- https://www.hiringlab.org/2024/02/20/labor-market-update-tech-jobs-below-pre-pandemic-levels/
- https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/technology-industry-outlook.html
- https://www.cnbc.com/2024/05/30/hiring-stays-strong-for-low-earners-vanguard-finds.html