After the global giants laid off thousands of employees, there were layoffs in the domestic market as well. Layoffs in companies with successful operations and good working conditions undermine the belief that work in the IT sector is safe and guaranteed.
The situation In Ukraine, covid, artificial intelligence, problems in Silicon Valley – all contributed to halving the demand for developers.
They could not have dreamed that more than 170 employees would be left without a project, at the moment when they were hiring new workers, in a well-known IT company in Belgrade. When, due to the crash of the crypto-market last year, their two biggest clients canceled their cooperation – they decided not to share their resignations and to keep their colleagues on the payroll – until, as usual, a new client appears.
“Slowly, month after month passed. Then, as such a crypto-crash followed the events in Russia and Ukraine, so the whole global situation, the economic crisis was followed by the fact that many clients started to cut costs. Despite all that, we continued to recover, but it wasn’t fast enough as we lost those two months and then sporadically lost some more clients”, says the founder of the company “Quantox technologists” Vuk Popović.
In the end, about eighty people lost their jobs in that company. Another large company recently laid off 200 workers – due to cost rationalization. Nothing surprising for those who follow the global IT market, where layoffs began to be distributed en masse from the end of last year. In January alone, more than 100,000 people were laid off. One of the reasons, economists say, is the large employment during the pandemic, when many started digitalization.
“The second thing was also the large drop in interest rates as a consequence of the monetary policy of the central banks, which, in order to prevent the economy from falling into recession, flooded the financial market with a large amount of cheap or almost free money. At times, interest rates were close to zero in both North America and Europe. That’s why they were able to borrow very easily and cheaply, to use that money to expand their business, and now they are at a time when interest rates are high, that’s why the price of their shares has fallen and it is now more difficult and expensive for them to borrow.” Explains economist and director of “Libek” Mihajlo Gajić, writes RTS.
That is why business expansion is also being abandoned, which in Serbia particularly affects “outsourcing” companies – those that do not export their product but work for clients from abroad. And those clients are now entrusting some less demanding jobs to chatbots.
“This whole situation was also reflected in advertisements and employment in the IT sector, what we have as official data is that even in the first quarter there were 50 percent fewer jobs compared to the same period of the previous year. The most sought-after are people from IT with a medium level of experience, i.e. mediors, next to mediors, the most sought after are later seniors, and we see the least demand in the junior range,” says Marko Vučetić from the “Hello World” portal.
That good programmers are still needed is confirmed by the case from the beginning. Eighty people who were laid off immediately found new jobs. According to economists, the recession will not affect the entire sector, but it is uncertain how long the crisis will last. However, it is expected that from the end of the year, things will begin to slowly return to normal.
