Tech sector employers anticipate further job losses in early 2024

Employers in Ireland’s tech sector anticipate further job losses in the first quarter of next year according to the latest Manpower Employment Outlook Survey published on Tuesday.

Confidence in the sector, the survey suggests, has slumped over the past two years and remains low despite a widely expressed hope that job losses said to have been related to pandemic era over-recruitment might have worked itself through the system.

Microsoft, Meta, Amazon, Google and Stripe have all been among the tech firms with big Irish operations to have cut staff over the past 18 months.

The report is based on responses from 420 employers across a range of sectors, company sizes and geographical areas around Ireland.

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Despite finding that more companies in tech expect to let workers go than anticipated in the early part of 2024, the job losses are likely to be in HR and other support roles, the report suggests, with 90 per cent of companies in the sector still saying they struggle when recruiting to find candidates with the more specialist technical skills they require.

The problem was found to be a common one across a range of industries, including health and life sciences as well as financials and real estate but companies operating in those other areas remained positive about adding to their wider workforces in the coming months.

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“Ireland’s tech sector has entered a period of contraction following a period of significant over-hiring.” said John Galvin, managing director of ManpowerGroup Ireland. “Tech companies, especially multinational software companies, have had to respond to slower-than-expected growth and reducing global demand.

“Most of these redundancies have been mid-level business support roles like HR and customer experience, hired in anticipation of large growth which did not materialise in 2023.

“We continue to see vacancies for specialist, high-skilled tech roles like cloud architects, cybersecurity specialists, developers and data engineers, where employers are still looking to fill vacancies despite the wider downturn. This talent shortage is being driven by demand for specialist skills rising faster than the economy can supply, but we know those with more generalist skills are encountering a much tighter labour market.

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“Companies are also turning to more contracting and interim hiring strategies to compensate for permanent candidate shortages in the short term,” he said, “but employers have to introduce and utilise upskilling programmes for tech candidates in the new year if they plan to overcome this talent shortage”.

Larger companies tended to be the most positive about intending to hire additional staff next year while respondents in Dublin were slightly more likely than those outside the capital to anticipate further recruitment.

The skills shortage, it found, was also being more acutely felt in the Dublin area with 84 per cent of the employers surveyed suggesting they are finding it hard to find the talent they require although the lowest figure for any region was 73 per cent in Connacht.

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