Reasons behind the wave of layoffs in the IT industry

The IT industry has been going through radical changes in recent years. While some of the biggest names in the tech sector, including Google and SAP, were once considered safe havens for jobs, they have now become symbols of constant adjustments. The new wave of layoffs comes as a response to a number of factors, including overhiring during the pandemic, investor pressures for profitability, and the accelerated development of artificial intelligence.

The role of artificial intelligence and technological innovations

The accelerated development of artificial intelligence (AI) and automation leaves a significant mark on jobs in the tech sector. Many companies, including Google, are utilizing AI to reduce the need for manpower in certain processes, thereby cutting costs and increasing efficiency. SAP recently announced plans for further restructuring alongside previously announced layoffs, emphasizing that their future strategy includes greater digitalization of business.

Investor pressure for efficiency

With high operational costs and pressure to reduce expenses, tech companies are increasingly introducing layoffs to boost profitability. Additionally, the pandemic led to a sudden surge in hiring to meet current demand, which has now become a burden given the reduction in that same demand. Google, for example, announced additional layoffs for "optimizing structure," attempting to simultaneously reduce excess staff in administrative and operational roles.

The growing importance of "versatile" skills in the IT industry

As the tech sector increasingly relies on automation, employees are being encouraged to acquire additional skills, such as AI engineering and digital analytics. In this environment, workers who possess adaptable skills, for instance, the ability to work with AI tools or basic programming, are becoming invaluable to companies. The rising wave of layoffs further emphasizes the need for education and adaptation of employees to new technologies to remain competitive in the job market.

Pandemic overhiring and its consequences

During the pandemic period, many tech companies like Amazon and Google recorded high growth, leading to intense hiring to satisfy increased demand. Today, however, the reduction in demand has left companies with a surplus of staff, which has become financially unsustainable. Consequently, Google and SAP are forced to take steps to align their operations with the current market needs.

The future of the workforce in the IT sector

While further growth in digitalization and artificial intelligence is anticipated, the long-term security of jobs in the tech sector remains uncertain. Key skills such as programming, AI, and data analysis are likely to remain highly valued, but employees will also need to adjust their expectations and develop new skills to keep pace with rapid changes in the sector. Numerous analysts predict that layoffs in the IT industry will continue to affect employees as long as companies do not find stable ways to integrate new technologies into everyday operations without reducing the workforce.

Challenges facing companies and workers

In an increasingly uncertain economic environment, organizations are more frequently adjusting their business models to cope with upcoming challenges. For many employees, this means facing uncertainties regarding job stability. To better adapt to changes, experts advise investing in personal education and focusing on flexible careers that allow work with next-generation technologies. Companies, in turn, face the need to balance cost reduction with preserving employee morale.