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As hiring freezes and layoffs hit, is the bubble about to burst for tech workers?

There are signs the tech jobs boom is beginning to cool. But for the most part, tech professionals remain unfazed.
Written by Owen Hughes, Senior Editor
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Image: Getty

Tech and IT workers have been reaping the benefits of a candidate-driven jobs market in recent months, with the demand for digital talent creating a seemingly limitless number of career opportunities for seasoned software professionals.

But brewing beneath the surface are signs that the party could be coming to an end. As business leaders brace for surging inflation and higher costs, hiring and salary freezes are likely to follow – leaving emboldened tech workers feeling markedly less buoyant, and perhaps with less options in job negotiations than they have recently become accustomed to.

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Until now, the tech industry has largely sailed through the economic turbulence that has impacted other industries. Remote working and an urgency to put everything on the cloud or in an app – significantly accelerated by the pandemic – has created fierce demand for those who can create, migrate, and secure software.

SEE: Fewer remote jobs for developers are being advertised as companies rethink hiring plans

However, tech leaders are bracing for tough times ahead. According to recent data by CW Jobs, 85% of IT decision makers expect their organization to be impacted by the cost of doing business – including hiring freezes (21%) and pay freezes (20%). We're already seeing this play out, with Tesla, Uber and Netflix amongst the big names to have announced hiring freezes or layoffs in recent weeks. Meanwhile, Microsoft, Coinbase and Meta have all put dampeners on recruiting.

If tech workers are concerned about this ongoing tightening of belts, they aren't showing it: the same CW Jobs report found that tech professionals remain confident enough in the industry that 57% expect a pay rise in the next year.

Hiring freezes and layoffs don't seem to have had much impact on worker mobility, either: just 24% of professionals surveyed by CW Jobs say they plan to stay in their current role for the next 12 months. This is down from 29% in 2021. Clearly, tech workers feel no pressure to hunker down for the approaching storm – a storm just 44% of IT leaders feel confident about weathering.

This poses the question: is it time for tech workers to take a reality check? The post-pandemic jobs boom was bound to slow eventually, and it's difficult to see how tech workers will continue being able to negotiate such huge salaries when companies are looking for ways to cut costs.

And if companies start clamping down on big bumps in salaries, what's next? Could flexible working find itself in the firing line as the tech jobs market tightens and the balance of power slips back in favour of employers?

SEE: Tech salaries just hit record highs. So why do IT staff still feel underpaid?

For the time being at least, tech workers have little to worry about. Hiring activity in the industry remains strong, particularly for those with the skills that continue to prove so hard to source – cybersecurity and software development amongst the most prominent. Still, the good times can't last forever, and as business leaders move to protect their bottom lines, job-hopping tech workers will have to decide whether it's better to stick or twist. 

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