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In An Uncertain Economic Environment, How Does The Future Of IT Hold?

Considering the ongoing economic environment, the issue of IT’s future is becoming increasingly prominent across all media platforms and social forums

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The last few months have proved pretty catastrophic for IT employees worldwide. Until recently, IT carried the reputation of being a sector that was unshakable. It was one of the few sectors that kept booming throughout the two disastrous COVID waves. However, with some of the biggest tech giants laying off employees, the economic environment has gotten increasingly erratic.

Considering the ongoing economic environment, the issue of IT’s future is becoming increasingly prominent across all media platforms and social forums. 

So, is the future of IT bleak?

The short answer to this question is no. 

To give a longer answer, it is important to view this crisis as a setback and a catastrophic phase that will give rise to new norms, corporate structures, and hiring models. 

Why Are IT Companies Laying Off Employees?

While even the most experienced IT professionals and analysts will struggle to find a precise answer to this question, there are multiple reasons why IT companies (especially the bigger tech giants) are laying off employees.

When the world was struggling with COVID, several IT companies ended up hiring a host of new professionals. While giving job opportunities to deserving professionals worked like a charm during the two years of the pandemic, managing finance became increasingly difficult for the companies once things got back on track. 

Resuming on-premise work and providing several new employees with multiple amenities increased the financial burden on most IT companies. This made it difficult for them to manage their employees to an extent that laying off was the only option they could resort to.

The Need To Reform Hiring Models

Another major reason IT companies are laying off employees is the prevalence of dated hiring models. When a company hires in-house employees, they are required to spend a fortune on onboarding, training, and a range of other office expenses. Moreover, it is obliged to pay a fixed salary to every employee, irrespective of the number of projects they work on.

With more and more SMEs and startups entering the IT sector, bigger IT companies struggle bagging enough projects to keep all their employees occupied. This continues the draining of their treasuries, forcing them to lay their employees off.

The Ray Of Hope For IT’s Future

Despite the situation looking bleak, it isn’t fair to say that the future of the global IT sector is insecure. The biggest ray of hope for the sector to get back on track and regain its credibility is to give preference to IT contractors. Instead of hiring full-time developers, companies can always hire professionals on a contractual basis to control their expenses.

Interestingly, while tech giants are laying off employees, SMEs and startups worldwide are looking for deserving IT professionals. Skilled professionals who were laid off unexpectedly can find suitable jobs with small and/or emerging IT companies with great potential.

Thanks to ever-increasing digitization and businesses embracing digital alternatives, there will never be a dearth of projects to work on in the global IT sector. If companies are successful in adapting to the modern hiring models and IT professionals upskill themselves to work as skilled contractors, the future of IT is bound to get brighter!

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
it sector layoffs

Chitiz Agarwal

The author is founder and CEO at Company Bench

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