#Collective #layoffs #talked #loud #group #spectacularly #affected #layoffs #Work
Already in 2023, they received messages at the management board and stock exchange level about the global trend of shifting business and operational functions and processes to Asia due to the rising labor costs in Central Europe. Probably, if it weren’t for the war on our eastern border, the biggest beneficiary of these changes would be the Ukrainian labor market. Let us remember that the first optimization decisions in the IT industry were made already in 2022: then there was talk of reducing the staffing level during the pandemic. The following year saw a radical tightening of the belt and everyone in the industry no longer had any doubts that the trend of radical transformation in IT would continue in the following year.
Despite everything, we have some black series. On the same day as Aptive Services, Infosys, one of the largest entities in the IT industry, dismissed 200 people in its Poznań branch.
Infosys has the strongest connotations with India in terms of capital. It is possible that it is strategically part of the trend I mentioned, i.e. the so-called offshoring of simpler processes in the field of ITO and BPO to Asian countries that offer qualified graduates of technical and economic universities, fluent in English, very ambitious, motivated and significantly lower paid than their colleagues in Europe.
Let us remember that the annual increase in labor costs and the high cost of standard non-wage benefits in Central Europe have caused the business level to question the need to bear the full cost of the employer, around PLN 10,000. PLN for a person who enters invoices and monitors payments in the SAP system. In addition, there are the rising costs of office, technical and management infrastructure. Thus, the trend that was reversed by investments in our region a dozen or so years ago is returning, i.e. reaching for much cheaper specialists from Asia, and thus the transition of business and technological processes.
Read also: Who will lose their job in IT? “Contrary to appearances, it is not worth firing the most expensive employees”
Will there be more layoffs?
I’m afraid so. Two large waves: the first, post-COVID in 2020, and the second, resulting from high interest rates in 2022, are already behind us. Today, it is clear that the technological revolution led by AI has left the industry with no choice. This year, another 32,000 have been deregistered in the US alone. jobs in the technology sector, and giants such as Snap, Microsoft, etc. announced reductions of 7-10 percent. Many projects were also frozen or canceled. This will hit the gaming industry hard, but also, as we have been observing since last year, the trend of dynamic development of e-commerce technology did not continue and here too significant project freezes were made, which resulted in layoffs.
Will shared services centers be closed?
Over the dozen or so years of existence of these centers, Poland has educated a whole generation of specialists who were able to develop on this market, but we have become too expensive for processes such as entering invoices into the system. Therefore, today there is a great discussion in the industry on how to acquire complex business and IT processes that are strategic for Poland, which will require higher and more expensive competences, so that – with the loss of shared service centers to Asia – we do not completely lose such specialists from the country. This is very important because, firstly, moving it entirely to Asia is dangerous for the quality and continuity of business, and secondly, we have many people ready to take over the transition of more complex processes. And this is what we have to fight for.
See also: Business under cyber attack
The optimistic thing is that there are still safe areas, nomen omen – e.g. cybersecurity, where the competence deficit will still be felt. The demand for specialists in the field of architecture, development, testing and AI security is certainly growing, so new positions will also open here and there will be many vacancies to be filled.
However, the IT bubble is bursting before our eyes.
Definitely. This is an effect similar to the very painful and long-term social collapse of the real estate market after 2008. This is not a dramatic decline of an era, but simply a great technological revolution – like industrialization in the past – which will radically verify the demand for specific skills and the supply of competences.
And what does it look like in recruitment? Has the attitude of IT employees, who were previously pampered, changed?
Yes, we can see clear symptoms of this: a change in expectations towards the employer – a tendency to consider mainly stable offers, in a safe work environment, in an organization with solid resources and a development strategy. We see a reluctance to change jobs or projects just because of the higher stakes and generally avoiding risk. The possible risk is acceptable when looking for an employer with the option of learning new technologies in the field of AI. We also notice lower requirements and less willingness to negotiate remuneration.
Read also: The IT industry is laying off tens of thousands of people. The reason is brutal
What else are IT employees more willing to accept? Back to offices? Less money?
We’re seeing more and more a willingness to work in a hybrid, not just a remote model, though specialists at senior level or with unique competences still feel in a position to assertively negotiate terms. We clearly see a trend towards accepting the ranges proposed by the employer without trying to raise expectations. This especially applies to specialists who do not have a fluent knowledge of English and therefore cannot freely apply for a place in international teams.
Which specializations can feel relatively safe, and who has anything to be afraid of?
In my opinion HR departments in the broadly understood talent acquisition and recruitment field should be concerned because layoffs in the industry are approximately 30%. they concern recruitment departments. It is not talked about out loud, but this is a group that has been spectacularly affected by layoffsin addition, both changing industries and the decision to survive in the profession may, for many, even mean a return to recruitment for production positions in industry and logistics.
See also: “This is one thing many forget.” Secrets of recruiting high-level managers
However, for IT specialists, development in several specific technologies will be crucial, and specialists will definitely be safe in the next few years. AI is certainly such a technology – from the automation of complex workflows to personalized customer interaction. Similarly, the Internet of Things (IoT), i.e. the so-called Internet of Things, connecting billions of devices to the network. Inevitably, the next chapter of the technological revolution is ahead of us – quantum computing, considered to be one of the most groundbreaking IT trends of the future, capable of fundamentally pushing the boundaries of traditional computing technology. Other future technologies include: Edge Computing – a path to decentralization of data processing – and 5G. The latter, although it has been a trend in IT for a long time, will continue to develop in 2024. A high-speed network is not only the next step in the development of mobile communications, but also a giant leap that can profoundly change society and the economy. We identify these technologies with such progress as autonomous vehicle driving or telesurgery.
Is it true that Polish programmers are increasingly working for foreign entities and leaving the country, and their place is taken by IT specialists from Ukraine and Belarus?
Yes. Due to the current situation on the Polish market, programmers and other specialists in the IT industry, but not only them, are looking for opportunities to directly cooperate with entities from the EU, USA, Canada and Israel. However, I would not exaggerate the influx of Ukrainian specialists to Poland, because they understand where the wind blows just as well and participate in the global labor market to a no lesser extent than Poles.
Read also: These employees save the Polish IT industry. “They are a great opportunity to make up for the backwardness in digitalization”
What else can we expect in the IT industry this year?
This year, the start-up Layoffs.fyi shared some interesting data with us. Its founder, Roger Lee, like some other forecasters, claims that this year’s layoffs will be smaller and more targeted than last year. There is some inertia on the Polish market, where optimizing financial decisions from the last quarter of last year are currently being implemented. Although economic factors are considered to be the main cause of layoffs in the technology industry, let us pay attention to the fact that many companies are shifting their resources towards the artificial intelligence race and want to recruit the best talents in this field. So even if jobs continue to be cut, new jobs can be created in other areas.
/i/2006107862.png?f=meta)
