Tech layoffs are contributing to the crypto winter
After the last few years of unprecedented growth, the global tech market has been fraught with layoffs. It started with the crypto crash in May last year and swiftly affected the rest of the tech industry. From big tech to startups, companies have been announcing layoffs since the second half of 2022. This has continued into 2023. The Asia region, being a major part of the tech ecosystem, has not escaped the layoffs.
US-headquartered companies, such as Amazon, Meta, Google, Microsoft, Salesforce, Twilio and Zoom, are not the only ones laying off employees. Asian headquartered players such as GoTo Group, Carousell and Glints have also made layoffs. Flash Coffee and Sea Group have also reportedly reduced headcount.
Crypto.com, a cryptocurrency exchange company based in Singapore, revealed in January 2023 that it has “made the difficult decision to reduce its global workforce by approximately 20%”. These announcements have not come out of the blue though, especially when you consider the current “crypto winter” (used to describe the global crypto market cooling). The recent collapse of FTX and the tech-heavy Nasdaq’s disappointing end to the year (finishing with four consecutive negative quarters, which only happened back in 1983-84) has contributed to the downturn.
With a global recession looming, constant talks of interest rate hikes, ongoing supply chain challenges and the Russia-Ukraine war, it is not surprising that many businesses are feeling jittery about what lies ahead.
The Asia region may avoid a recession, but if Europe and the US experience a downturn, demand will likely slow and this will undoubtedly have an impact on growth in APAC. Organisations in the tech industry (including startups) have spent the last few years on a massive hiring spree and many over-invested. The recent raft of layoffs is merely a way for those companies to rebalance from the last few hectic years.
So, what is in store for the tech industry over the next few months? Read on to find out.
Industry trends
> Organisations in the tech sector are tightening their belts and have reduced spending.
> Hiring activity has fallen and many companies are not replacing employees that leave voluntarily.
> Following years of “growth at all costs”, tech companies have shifted their approach due to economic uncertainty and are now focusing on prudence, harmonisation, optimization and profitability.
> We expect M&A activity to rise over the coming months as organisations take a more strategic approach to growth. We have also seen a lot of non-tech companies treat the recent spate of layoffs in tech as an opportunity to acquire talent that has been impacted by restructuring.
> Another observation from the last few months is that some special projects and new product development initiatives have been put on hiatus as companies and investors from the VC and PE firms monitor the market and err on the side of caution.
What do tech candidates in APAC want?
More stability:
Candidates want job stability, which isn’t surprising given the current economic climate. Besides a robust balance sheet, candidates want to work for companies with a long-term vision for growth and sustainability.
A return to traditional industries and multinationals (MNCs):
Increasingly, candidates across APAC are turning back to explore roles within more traditional industries, as part of risk mitigation. Candidates’ risk appetite is waning as they prepare for a possible economic recession.
Competitive remuneration packages:
Regardless of the uncertain market climate, candidates still expect competitive remuneration package from employers. This especially holds true for candidates who are currently employed, with no strong push factors.
In-demand tech skills
ARTIFICIAL INTELLIGENCE (AI), MACHINE LEARNING (ML) AND WEB 3.0:
Thanks to the recent chatter and excitement around ChatGPT, generative AI is the current buzz in the tech world and looks to be here for the long haul. Engineers skilled in AI, ML and data science are well positioned to ride this trend.
IT OPERATIONS:
From network infrastructure to applications and cloud hosting, candidates with IT operations expertise remain highly sought after. This skillset was in high demand during the pandemic, when virtual working became the norm because of pandemic-enforced lockdowns. And remote work is something a lot of candidates still want despite the pandemic-related restrictions coming to an end. Many companies have launched hybrid work programs as a result so that candidates get to split their time between the office and working remotely. In addition, as many companies plan to optimise their current systems and processes, IT operations roles will only grow in popularity this year.
INFORMATION AND CYBERSECURITY:
As a result of the shift to remote work during the pandemic, companies now have advanced, complex networks and store more data in the cloud than ever before. Keeping their networks and data safe is top priority for all companies, especially when you consider that organisations in APAC are attacked 51 times per week, on average, data from Check Point revealed. And organisations that are planning to optimise and consolidate their networks and tech platforms over the coming months will need candidates with cyber skills to ensure security is top of mind.
DATA SCIENCE, ENGINEERING AND MANAGEMENT:
Data professionals with experience in data collection, organisation and storage (in a way that is efficient and secure) continue to be in demand. Many companies are looking for tech professionals with data analysis and information security experience as well as roles like data architects and data engineers..
TRANSFORMATION AND COMMERCIAL (DIRECT REVENUE-GENERATING) ROLES:
Tech candidates with expertise in transformation and commercial roles are highly sought after. A lot of companies undergo transformation during periods of uncertainty to generate efficiencies and we have already seen a rise in demand for candidates with these skillsets. We expect demand to soar further in the coming months.
Recent Placements
US based Global Commodity Company
Regional Technology Risk & Security Manager, APAC
Global Education Group
Regional IT Director, APAC
US based Medical Device Company
Head of IT, APAC
Geospatial Analytics Company
Software Engineering Director
European Shipping and Logistics company
Regional IT Security Manager, APAC
Global Optoelectronics Manufacturing Company
IT Director, Asia
Global Renewable Energy Manufacturing Company
Senior Director, Infrastructure and Cloud Services
Airlines & Aviation
Senior IT Security Manager
Portfolio Investment Group
Associate Director, Cybersecurity Solution Architect
Luxury Retail Company
Senior IT Manager, Asia
Global Provider of Technology Services, Products and Solutions
Global IT Director, Applications
Startup TeleHealth Company
Chief Product Officer
2023 will be the year of correction
2023 will be the year of correction and realignment. Many companies will embark on change, transformation initiatives and reorganisation programs in response to the evolving market conditions. Despite predictions that APAC will escape a recession this year, a downturn in Europe and the US is likely, which will inevitably impact growth in the region. So, it comes as no surprise to learn that organisations will be focusing on boosting performance, innovation and, ultimately, the bottom line as they navigate a possible global recession.
One thing that is abundantly clear is that the Great Resignation and “quiet quitting” phenomena that we have seen over the past year may become less relevant corporate themes in 2023.
The pendulum has swung (even if just a little) from a candidate market to an employer market.
Although the latter half of 2022 was reminiscent of the dot-com crash seen in the early 2000s, it is not all doom and gloom. There are still pockets of tech hiring across various industries. Despite the macroeconomic headwinds, for companies to thrive, seeking top talent continues to be an infinite game.
About the author
Karen Yap | Director
+65 6513 2542
With more than 16 years of executive search experience, she focuses on hiring for mid to senior level mandates within the APAC region, covering the following specialist functions:
- Digital & Technology
- Commercial: S&M
- Strategy & General Management
She works with global multinationals, locally based conglomerates and Startups, with clients coming from consumer lifestyle, technology and professional services sector.
If you wish to discuss any of the observations in this report, please don’t hesitate to reach out to Karen.
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