Why IT Job Market is Bad Right Now?*
Exploring Job Market Cycles and Key Influencing Factors.
Today, I came across a Reddit post, titled “Why is the job market so bad right now?”
While I am no longer looking for jobs (working for myself), I can feel the job market by seeing posts on LinkedIn feeds.
Here, I share some thoughts on this.
Table of Contents:
· 1. Overhire during the COVID time
· 2. The end of historic low interest rates
· 3. Software Engineer Salaries Are Excessively High
· 4. Failed/Failing Hypes
· 5. Layoffs as a Natural Consequence
· My Advice
1. Overhire during the COVID time
During the COVID period, significant spending was on software (and hardware) to support remote work. Some tech companies expanded the workforce, some did too much.
Mark Zuckerburg explained this well in this message (for laying off 11000+ employees) and expressed “especially sorry”.
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.” - Mark Zuckerberg’s Message to Meta Employees, 2022-11-09
2. The end of historic low interest rates
During COVID, interest rates hit historic lows, making it easier to secure funding.
With tech companies synonymous with growth, significant investments flowed into the sector in hopes of achieving strong returns.
However, the low interest rate period does not last forever, in fact, only a couple of years.
3. Software Engineer Salaries Are Excessively High
The overhiring during COVID drove up salaries for software engineers, even for graduates with no experience.
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