Daria Dondea

Software Jobs Plunge to New Lows – Is the Industry in Crisis?

Explore the rise and fall of tech jobs, analyzing key trends, market shifts, and the future outlook for the tech industry workforce.

October 7, 2024 5:10 PM

3 MIN TO READ

Software Jobs Plunge to New Lows – Is the Industry in Crisis?

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So, what happened?

Before going even further in our analysis, we first need to discuss what tech jobs mean. When we think about tech jobs, we need to be thinking about jobs that include development processes and maintaining applications and software. Here we have job positions that range from software engineers to data scientists, cybersecurity positions and specialists, and anything relating to the user interface.

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We can all agree that tech jobs are associated with innovation, dating back to personal computers in the 70s to the development of the internet in the 90s. With all the new technology discovered, the need for IT professionals was growing, leading to one of the most important sectors in the global economy.

IT Landscape Now

Did IT jobs see a decline? The answer we all have noticed is yes, but why?

Well, ever since 2023 started we have seen a constant slowdown in the tech market. And, the reason behind the tech decline are the following factors:

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AI: Artificial intelligence came and caused anxiety for all of us, especially when it comes to automation and replacing human jobs.
Market Oversaturation: The growth of tech graduates in the last couple of years has been at the moment.
Economic Slowdown: The economic slowdown left a mark on tech companies, leading to layoffs and a smaller hiring rate.

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However, more recent studies and data show a more optimistic outcome for tech jobs. The first quarter of 2024 showed a significant decline in the tech industry jobs compared to the same period last year. But, this process does not take place in all the fields.

Emerging Tech Fields

Even though some sectors might experience a decrease when it comes to job opportunities, fields like blockchain, cybersecurity, and IoT are experiencing consolidation.

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Blockchain technology is constantly evolving and the tech behind cryptocurrencies is finding apps and secure data storage. Cyber security is a must-have when it comes to the developing areas of tech. It goes hand-in-hand with anything related to the advancements of a more secure space for technology and we all need to be mindful of it.

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Even more so, IoT also known as the Internet of Things is also a tech field that is expected to grow even more, creating the need for professionals who can design, develop, and make sure we have a secure system to operate in.

Tech Jobs WorldWide

As of this year, there are available around 1.7 million open tech positions worldwide. The US estimated number of open job positions is around 438,000. Another big contribution comes from Japan, which has around 350,000, and let’s not forget about Europe, where the estimated number of job openings is around 960,000.

And, if those numbers seem big for you, let’s compare them with the global workforce. To start with, more than 1.25 billion people are working in the “information” field. This means that 1.25 billion people are working with their phones or computers every day.

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Out of this, by the end of 2024, the number of developers will be 28.7 million, translating into only 2.3% of information workers being developers. In the US, the number of softer developers getting closer to 1.7 million, which means that the market is overall expecting to hire the number of software developers equal to the number of US tech workers.

The Current Tech Job Market

The tech job market has seen a period of intense job hiring in the past few years, especially during the pandemic. While we have seen a slower pace when it comes to tech job hiring, compared to previous years before 2018. This means, that even though the number of job openings in technology has grown.

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Tech opportunities are expected to be seen in a slow but surely increase over the next years for smaller and more niche markets such as web developers and digital designers. These statistics were made by the US Bureau of Labor Statistics projects, being linked to the growth from 16% from 2022 to 2032. This growth translates into approximately 19,000 new jobs created yearly on average.

Tech Unemployment Rate

The US Bureau of Labor Statistics known as BLS, sees a positive trend when it comes to the tech sector. Even more so, the tech unemployment rate has lowered from 3.5% in February 2024 to 3.0% in March 2024, all of this with an additional 203,000 new tech jobs. Which is lower than the overall US unemployment rate, which has ranged between 3.7% and 3.9% since August 2023.

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Yet, according to the unemployment rate from Janco Associates, the rate was 3.5% instead of 3.0% as the BLS reported. For April 2024, the expected rate was estimated to be 5.0%, however, the number was 2.8%.

What Does the Future Hold?

While some predict that a slight slowdown will occur in the overall global job market compared to the previous year, the overall outcome remains a positive one. More recent tech industry layoffs are more likely to be leveled off in 2024.

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The US Bureau of Labor Statistics projects that the field will see a steady turnover of about 6% which requires approximately 377,500 new tech workers. Similarly to the US, data predict that the European tech job market will act alike.