posted 28th February 2023
Big Time Tech Redundancies: Recession or Reorganisation? Meanwhile the SME market keeps powering on!
It is more than half way through February as I write this and for the first time for a long time, parts of the economy are experiencing substantial, large scale redundancies. It seems that hardly a day goes by without hearing about Google, Meta, Twitter, Amazon, Facebook or another major technology company announcing thousands of redundancies normally on a worldwide basis and of high value jobs. Normally followed by a spate of LinkedIn messages saying that such and such a person has left one of the above with varying degrees of outrage or acceptance and if anybody knows of any suitable vacancies to please contact them.
The initial reaction is to see this as a sign of an old style recession with all the problems associated with it but when you examine the actual figures on the economy, dig into the data behind the redundancies you see a different picture. We have lived in a slightly unreal economic time, the age of the unicorn, where profits have been secondary to size and scale and the way the economy has powered on through the pandemic and whatever economic conditions that prevail has been amazing.
It now seems the decision has been made, silently and by whom we don't really know, that profit is the new king! So once that became clear all the major companies seemingly acted as one and decided to downsize their workforces immediately.
The mantra is that companies have been over enthusiastic in recruiting over the last two years and this is a process of adjustment not a sign of recession. If you look at what is happening it seems to be roles in HR, training, talent acquisition, marketing, and research and development that have gone. Either individual positions or outsourcing of whole departments. The key factor seems to be it is almost exclusively to larger or multi-national companies.
If you look beyond this and focus on a company like TSR, we are a niche recruitment company operating in the Managed Service space providing technical and sales staff to a range of clients, 80% of these employ 10-100 people and 20% employ 100-10,000 people. The idea of a recession affecting us would just not be true, and at this point, does not seem to have affected any of our clients.
Demand for our services is still very strong. Talking to owners of the companies in that 10-100 employees bracket there has been no downturn. They are still recruiting with a real demand for 1st/2nd/3rd Line Engineers, Project Engineers, Technical Consultants, and both New Business and Account Management sales personnel. The reality is there has been no sign of a new supply of newly redundant staff in any of these categories and the truth is supply is still very tight.
TSR as a company has made changes, including a slightly smaller workforce through not replacing all staff who have left, but vastly improved revenues, remote working, and the use of high quality part-time roles. However, demand is still unequivocally strong. That is our perspective.
However, what is the perspective of our clients? The reality is most people running companies are still optimistic. My belief is that the redundancies that are being made are a precursor to the next stage of growth for these large tech giants where the focus will be to make an actual profit. At the lower end, growth will carry on in smaller companies as it has ever since the end of the first stage of the pandemic.
So the IT professional staffing situation is a mixed picture, none of which is that bad and actually is really pretty positive. Bigger companies reorganising and restructuring but only before kicking on again in their next stage of potential growth while the SME sector is generally redundancy free and continuing to grow.
If you are an IT sales professional looking for a new role or a potential client looking to recruit IT sales professionals, we can help you.
Get in touch by emailing us at contact@tsrltd.co.uk or calling us on 020 3837 9180. We look forward to meeting you!