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After the big resignation, the big recruitment freeze in IT

A growing number of tech companies are starting to put the brakes on recruiting, but is this the time to stop investing in IT profiles?

As the global economic downturn continues to deepen, many IT companies are reacting to fears of an impending recession by putting the brakes on hiring. While cutting payroll costs might seem like an easy way to cut expenses right now, the jobs landscape remains in flux, with studies showing that workers are just as pessimistic about the economic climate as their employers. .

As a result, 60% of US job seekers say it’s more urgent to find a job now, before market conditions worsen. Companies that have decided to stop hiring could thus find themselves with a skills drain that they would not be able to plug.

Where are the hiring freezes in the IT sector?

Google and Microsoft were among the first companies to announce a pause in recruiting, quickly followed by Meta, Apple and many others. As reported by The Verge, Google sent a memo to its staff in July stating that the company would “slow the pace of hiring for the remainder of the year.” Just over a week later, The Information reported that Prabhakar Raghavan, senior vice president of Google, sent an email informing associates that no new staff would be hired for the next two weeks. The freeze would not affect existing job offers, but no additional offers will be offered to those whose application is still pending.

Microsoft also announced that it will withdraw all of its job postings and slow down recruitment in the near future. According to a Bloomberg article, the slowdown in hiring will primarily affect the company’s cloud computing and security units. The announcement comes two months after Microsoft said it plans to cut hiring across its Windows, Office and Teams groups.

Twitter, Meta and Apple have followed suit

Google and Microsoft aren’t the only tech companies that have started taking a more cautious approach to hiring. Earlier this year, Twitter first froze hiring, then laid off 30% of its HR team earlier this month. In late June, Meta CEO Mark Zuckerberg came across as hostile in a call with employees, saying that “realistically speaking, there’s probably a bunch of people in the company who shouldn’t be there. “.

A month later, the company’s financial results for the second quarter of 2022 showed the first drop in revenue in its history, with Mark Zuckerberg telling investors that the economic climate looked even worse than in the previous quarter. Around the same time, Apple also announced that while the company will continue to invest in product development, it will no longer increase headcount in certain departments next year.

An uncertain hiring landscape

These measures are part of a context of uncertainties in the geopolitical and economic landscape, which has led most companies to adjust their financial outlook. Layoff aggregator TrueUp estimates that since the start of 2022, 487 IT companies have announced layoffs, affecting 86,166 employees. Jack Kelly, Founder and CEO of The Compliance Search Group and Wecruiter.io, said companies will always take steps to mitigate poor economic conditions, with cutting costs within the workforce often an option. easy to implement.

“The sad thing is that companies almost always immediately look to cut worker costs,” he said. “It’s never the CEO who says to the board, ‘Hey, let’s all make a big cut.’ It should happen, but instead, companies end up cutting wages and benefits. I think we’re going to see the job market get very soft which will make it difficult for a lot of people to find a job.”

Hybrid working practices questioned

According to Jack Kelly, companies are also likely to be more careful about how they hire and, when hiring freezes turn into layoffs, we could see a reversal of some hybrid working practices born out of the pandemic, as employees fear being labeled as “lazy” or “underperforming”. “I wouldn’t be surprised if a lot more people went back to the office because, honestly, I would,” Jack Kelly said. “I would be afraid that if I’m at home and they decide to fire people, if they haven’t seen me or if they don’t remember who I am, it will be easier to get rid of me than someone who is in the office every day,” he added. This issue of proximity bias remains a source of concern for organizations looking to successfully implement hybrid working models.

However, Sean Farrington, executive vice president of EMEA at e-learning publisher Pluralsight, doesn’t think slamming the door on potential new hires is necessarily the smartest course of action in tough times. While Europe’s economy isn’t healthier, Farrington said the European companies with large IT teams he spoke to are instead assessing the talent they already have and looking for opportunities to improve skills and reorient existing employees. Sean Farrington doesn’t think downsizing is the most reasonable approach to cutting costs. “Especially considering the growing skills gap of technically skilled people and the broader policy dialogue on how to reinvent the economy in a digital world,” he said.

“Pay attention to human capital”

Studies show that employees want to be offered regular training and the opportunity to develop other skills and are more likely to stay with a company if they are offered these opportunities. The big quit phenomenon has been a major talking point in the first half of this year, and for companies that are no longer hiring, losing more employees is not an option. “If someone leaves your business, you have a void, so you can’t be as efficient and productive as you were,” said Sean Farrington. “The first thing to do is pay attention to your human capital and make sure that you don’t unintentionally lose people by not showing commitment to your employees, or by not showing that you value them in some way. way,” he added.

Although the job market has largely rebounded from the pandemic, the impending recession is likely to bring a whole different set of challenges for job seekers. If the hiring freeze at tech companies hasn’t yet turned into mass layoffs, those currently employed will still have to contend with stagnant wages, below-inflation wage increases and rising labor costs. transport related to soaring gas prices, as the boom seems to be coming to an end.

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