- Tech worker demand is beginning to reflect signs of a broader economic downturn, as Indeed job postings for software development jobs dropped 5.8% year-over-year, as of March 27.
- "Demand for tech workers appears to be slowing down, but is doing relatively better than the overall labor market," said Nick Bunker, economist at Indeed, in an email to CIO Dive. The company found a bigger contraction in overall job postings in the U.S.: They're down 15.2% from the same period last year.
- For context, on March 27, 2019, the trend in overall job postings was down 1.7% compared to the same date in 2018.
The economic downturn induced by COVID-19 is more a question of when than if. In a talent-thirsty market like IT, one of the first warning signs is a dwindling appetite for technologists.
A slowdown in hiring doesn't happen in a vacuum. Rather, it's the likely consequence of hiring freezes and projects kicked back to subsequent quarters or years. Tech that drives remote work is the new priority for 19% of IT leaders. The hiring lull comes as 64% of CFOs prepare cost-cutting measures, according to a PwC survey. IT spend — alongside facilities — is one of the areas targeted for cutbacks.
Tech giants are impacted too. Microsoft adjusted its revenue guidance due to supply chain woes in its personal computer segment. Analysts warn Google might see its ad business impacted by the virtual halt of the travel industry.
It's hard to project exactly how large the impact to the tech industry will be without a sense of when the downturn ends. Tech job reports can help measure the scope of the projected lull. In February, the tech sector gained 33,500 positions, the strongest start to a year since 2017.
But those gains may be impacted by the scope of the looming recession. For the week ending March 28, the Department of Labor reported 6,648,000 initial jobless claims, almost double the unemployment levels seen the week prior. It is the highest number "in the history of the seasonally adjusted series," according to the department.