Despite layoffs in the sector, positions such as Chief Technology Officer are still in demand by companies experiencing a digital transformation. Candidates now look more at the business model before choosing a company.

The sector of large technology companies is experiencing a shock like it has not been seen for a long time, and it has a direct consequence on a sensitive variable: employment. In the last months of 2022 and the first days of this, the layoffs numbered in the thousands.

The figures are still uncertain, and the balance will have to be seen after the first quarter of the year, but at least 50,000 dismissed are from big tech. From multiple causes and with an impact on the region and the country, the crisis, for now, has not made a dent in the searches for positions of technology leaders, which are still valid.

The difference, as can be seen from what was revealed in Glue Executive Search, is that those who star in the searches are traditional companies undergoing digital transformation. In addition, the tech tremor makes candidates more cautious: now they are analyzing the business model and financing before venturing out and going up to the next startup.

Meanwhile, the outlook is not certain. During 2022,Meta announced 11,000 layoffs, while Elon Musk, in his first weeks at the helm of Twitter, reduced his staff by almost 50%. This trend also impacted Argentine companies during the so-called “crypto winter”: the fall of the main crypto assets and the consequences it had on companies in the sector.

So far, in 2023, other tech giants have joined the wave. Alphabet, parent of Google, announced the layoff of 12,000 workers in product areas and regions, equivalent to 6% of its workforce. Tech giant Microsoft officially reported that it will lay off 10,000 employees, while Amazon announced that it plans to lay off more than 18,000 employees. The corporations mentioned are examples: many other companies in the sector experience a similar situation

The phenomenon breaks a trend. In recent years (and especially after the start of the pandemic in March 2020), many companies aggressively hired a large number of personnel in order to meet the new and numerous demands of consumers whose purchasing habits had turned towards e-commerce and other online services.

But, from the abandonment of isolation and the return of some face-to-face trends, they are recovering. Add in the spectre of a recession, higher interest rates, the fall of some crypto players, and lower demand due to rising prices, and many tech companies are facing game changers.

“The technological sector is going through a moment that entails restructuring the work teams; that is undeniable. But despite the series of numerous layoffs that are taking place in tech companies, this does not imply that the technological profiles are on the decline, especially if we refer to executive positions”, says Daniel Iriarte, associate director of Glue Executive Search.

“Certain positions are still very current, and various searches arise. We observe that many companies continue to ask for professionals with a CTO profile (Chief Technology Officer or Director of Technology) or Digital Transformation Leaders; something similar happens in positions of data analytics directors and digital product, among others, which are new or highly demanded by companies native companies and by companies that are undergoing digital transformation processes”, explains the expert.

The growth in the importance of technology globally is not at stake. “Companies still need good leaders who can get the most out of their work teams (and that is also valid for delicate moments in the industry). In addition, many companies, without being digital natives, are in a transition in which these positions are essential”, adds Iriarte.

Meanwhile, changes in the general employment landscape make candidates think twice about a change. “A reality of this moment is that the new situation generally makes candidates more cautious about a change: they inquire more about the project’s financing, investment rounds or the business model. In this sense, it may be that those projects with more risky or weak business models -or with more demanding financing needs- today have a more complicated panorama regarding talent, ” warns Iriarte.

Original Material Glue Executive Search – our member from the Argentina e Uruguai