Tech hiring in SA drops amid global layoffs

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 26 Jan 2023

The global wave of large-scale retrenchments has hit SA’s tech sector, with recruitment in the local industry taking a dip during November and December.

This is according to the latest CareerJunction Employment Insights, which provides an analysis of the supply and demand trends in the online job market, from data gathered from Saongroup South Africa, which works with over 5 000 of SA’s top recruiters.

According to the report, hiring activity across most industries increased by 3% between December 2021 and December 2022. However, there was a 6% month-on-month decline in hiring activity from November to December 2022, in some sectors, including the tech sector.

This has seen local IT professionals switch jobs and explore related industries, it says.

The shift in IT hiring comes amid huge declines in hiring activity at the world’s biggest technology companies, as job posts closed faster than new hiring positions were opened in the last two months of 2022, according to data from research firm GlobalData.

“The decline in hiring activity was driven by a slowdown in recruitment across the information technology, and business and management sectors, as well as the sales and admin, office and support sectors, with the IT industry seeing a 3% decline over the last two months,” says CareerJunction.

“Many IT professionals who switched employment moved into the following industries: finance, manufacturing, fast-moving consumer goods, retail and wholesale, education, and consulting and regulatory.”

According to CareerJunction, the decline in IT hiring was across several verticals, including hiring for positions such as database design, data analysis, data warehousing, software development, business administration and data analysis.

GlobalData's Job Analytics report for Q3 2022 shows several companies across the globe halted their IT talent hiring initiatives from July 2022.

These include Nestle, which saw a 42.8% decline in IT hiring in July 2022, when compared with the previous month, and Coca-Cola, which saw a tech hiring activity decline of 11.2% in August.

US-based footwear and apparel company Nike’s IT hiring activity declined by 19.64% in November 2022, when compared with October 2022, notes GlobalData.

Tech jobs massacre

The ongoing slowdown in the tech industry comes as organisations in the sector announced large-scale job cuts from the last quarter of 2022. These include the likes of multinationals Amazon, Google, Meta, Google parent company Alphabet, Salesforce, Twitter, Spotify and Cisco.

IBM and SAP this week become the latest tech giants to announce jobs cuts, planning to slash 3 900 positions and 2 800, respectively, across their global workforce, according to a Bloomberg report.

Software giant Microsoft said earlier this month it will lay off 10 000 employees.

E-commerce giant Amazon also announced this month that it is planning to retrench over 18 000 employees, noting the majority of these layoffs are in Amazon stores, and its people experience and technology solutions divisions.

The tech sector announced 97 171 job cuts in 2022, up 649% compared to the previous year, according to consulting firm Challenger, Gray & Christmas.

Layoffs at Alphabet, Microsoft, Amazon and IBM combined are expected to eliminate nearly 44 000 positions in January, it says.

Many of these tech companies benefitted from increased demand for their services during the COVID-19 lockdowns, but as customer behaviour returns to pre-pandemic times, some have seen declining demand and dropping share prices.

“The overall economy is still creating jobs, though employers appear to be actively planning for a downturn. Hiring has slowed as companies take a cautious approach entering 2023,” says Andrew Challenger, senior VP at Challenger, Gray & Christmas.