Lessons and Perspectives from the Information Technology Market Crisis

MarketLessons and Perspectives from the Information Technology Market Crisis

To analyze the current scenario of massive layoffs in the technology market, which began last year with the crisis caused by the war in Ukraine and the economic effects of the pandemic, it is necessary to start with two questions. The first one: faced with a period, already then, very promising for technology and innovation companies, could we have acted more conservatively, but only now have we realized it?

The reading that must be made of these questions is what leads us to the middle, and to the search for balance -or something closer- so that companies continue to be competitive in a fierce IT market. On the one hand, if they seem to lack a real commitment to healthy growth, on the other hand, this “momentum” cannot be given up, as the market demands not to miss the notorious “timing” to survive. in running.

And from the scale of the damage it is clear that even “big technologies” could not find their balance. At Twitter, employee cuts are up to 50%; Meta, owner of Facebook, has laid off 11,000 employees; And at Amazon, layoffs were 18,000 people. Among domestic start-ups, Loft, which operates in real estate, confirmed three rounds of layoffs, the latest involving 310 employees, and Alice, from the health district, made two rounds of layoffs, totaling almost 200 layoffs.

The scenario of two years ago predicted a shortage of technology professionals, because startups, in particular, were betting on a very promising market trend. Reflecting the “inflation” of capital from investors, most entrepreneurs imbue themselves with greater self-confidence, imagining that they will always run their businesses in that upward direction. They took risks, so to speak, with great enthusiasm. And they were hit with a bucket of cold water with the economic downturn and less capital available to invest in this business.

For 2023, the million dollar question is: Is this just a passing phase, after several downgrades, or is the cooling trend still going on much longer? It is too early to speculate as signs of recovery are currently unclear. But, keeping a sense of balance, a “slightly timid optimism” might be best.

For those who have been hit by the wave of layoffs, frustration is not the way to go. It may not seem like it now, but there is no doubt that any career change in the field of technology holds great promise. Recent data from global consultancy Bain shows that 77% of CEOs surveyed plan to increase their technology budget by 2023. This is because they see this as the way to become more productive, agile and competitive. Also according to Bain, more than 75% of the largest venture capital investments have been in IT infrastructure and enterprise software companies in recent years.

Maybe the wait for an opportunity to enter this market will get a little longer, but not much. Companies are still looking for people with experience, just now with a more polished look. In addition, Brazil has already recognized the importance of diversity, and this is a positive point for those looking for their first job. Even in times of crisis, technology and innovation are the pillars of economic development, and therefore it is an investment that companies cannot do without.

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