IT Specialists Still In Demand Despite Massive Layoffs By Crypto, Tech Companies - Experts

MOSCOW (UrduPoint News / Sputnik - 19th January, 2023) IT specialists that lost their jobs in a recent wave of layoffs in major crypto, social media and tech companies won't have any trouble finding employment in other IT sectors as well as in non-IT companies as their skills are still in demand, experts told Sputnik.

Coinbase cryptocurrency exchange became the most recent tech company to announce it would fire about 20% of its employees amid negative trends on the market after the collapse of another major exchange, FTX. Crypto.com and Kraken also reported making major cuts to their workforce recently, similarly to major tech companies such as Meta (banned in Russia as an extremist organization), Twitter, Amazon, and Netflix.

FTX filed for bankruptcy in November, sending ripples throughout the industry, with doubts about its future resurfacing amid declining confidence in crypto. FTX's financial troubles have been attributed to its lending of customer funds to Alameda Research, a cryptocurrency hedge fund created by FTX founder and former CEO Sam Bankman-Fried, which collapsed alongside FTX.

In December, the US government indicted Bankman-Fried in what prosecutors have described as one of the biggest financial fraud cases in US history. Prosecutors claim FTX violated US campaign finance laws and schemed to misappropriate customer funds.

"With the recent news stories highlighting how volatile crypto can be, I think public trust is understandably shaken. To me, this means the crypto industry will either stagnate or decrease in the near term," James Fox, a software developer who also runs career counseling organization Maximum Career, told Sputnik.

He warned that more layoffs were likely to come.

This sentiment was echoed by Archie Payne, president of CalTek Staffing, a recruiting firm that works in the IT and engineering sectors. Payne noted that the crypto industry's overall workforce will shrink in the coming year for the same reasons IT companies started to cut their personnel.

"Many businesses in the tech industry saw a massive surge in their use and revenue over 2020-2021, or expected to see major growth in their industry, but have either seen sales fall or not materialize in 2022. Many companies hired for a growth period, and in some cases over-hired even, for the growth they were anticipating, so the layoffs happening now aren't necessarily an indication of economic trouble ahead so much as they're compensating for over-optimistic hiring," Payne explained.

An IT specialist from Virginia, who chose to remain anonymous, told Sputnik that the mass layoffs point to an overall economic slowdown, which has spilled over to the IT sector.

"I can tell you that by the time I arrived at my new position in January, all new and existing IT projects had been canceled or postponed for financial reasons," the expert said.

Nevertheless, the current situation in the labor market looks positive for dismissed IT workers as their skills remain sought after by various companies, according to industry insiders.

"As of the most recent statistics I saw, there are still more than 350,000 open roles in tech currently, so openings are still outpacing talent on an industry level," Payne told Sputnik.

The most recent report from tech career hub Dice showed that more jobs were posted in the last quarter of 2022 than in the last quarter of 2021, matching the trends the expert said he himself observed across the employment marketplace.

"Particularly for those in niches like cybersecurity, AI/ML (artificial intelligence/machine learning), blockchain, and UI/UX (user interface/user experience) development," he added.

While IT workers are usually associated with companies that are focused on software development, they are actually in demand across all sectors of the economy, including those that are not viewed as IT-reliant, such as insurance, banking, retail and entertainment, Fox noted.

"There is a massive shortage of IT workers across all industries, and limiting IT workers to the traditional 'IT Industry' is not the whole picture. Switching industries can be difficult, but in general IT jobs that span across industries rely on comparable skills and proficiencies. Because of that, I think it won't be that difficult to absorb the effects of these highly publicized layoffs," Fox suggested.

Meanwhile, the IT worker from Virginia said that the job market was "very dependent on what set of skills you have and varies from company to company in terms of how financially stable they are."

"The ability for tech employees to get hired in corporate IT will largely depend on the skill set they acquired during their time in tech and the company's unique needs, but will likely grow more difficult if the economy continues to shrink," the specialist concluded.