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Tech Layoffs: COVID-19 Means Ups and Downs for the Foreseeable Future

IT pros in the mobile workforce will find it easier to get a new job.

Edward Gately

March 26, 2020

4 Min Read
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The COVID-19 pandemic has led to a record-shattering number of Americans filing unemployment this week, and uncertainty looms as to which types of jobs are being impacted and how long people will be out of work.

According to the U.S. Department of Labor, nearly 3.3 million initial unemployment claims were filed this week, smashing previous records of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982.

So how is this impacting tech sector employment? Victor Janulaitis, Janco Associates‘ CEO, tells Channel Partners any IT pro who already is working remotely is probably in a much safer position and more protected from a layoff.

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Janco’s Victor Janulaitis

“On the reverse side, IT pros working on legacy systems at companies that have not moved toward mobile computing for enterprise operations are at the greatest risks,” he said.

Tim Herbert, CompTIA‘s executive vice president for research and market intelligence, tells Channel Partners that analysis of employer job posting data from Burning Glass Labor Insights suggests there may be more stability in IT hiring than what may be expected given the situation.

“As businesses across the economy make the transition to remote work and operations, the need for robust platforms to facilitate communications, collaboration and continuity become even more critical,” he said. “It makes sense that the companies providing these technologies, along with ancillary services such as cybersecurity and data loss prevention, will continue to maintain or even expand their workforce in response to customer demand.”

Many industries have taken a financial hit due to the coronavirus, but what is unknown is the degree to which lost revenue is postponed, shifted to other expenditures or permanently displaced, Hebert said. The length and severity of the outbreak will determine if the recessionary impact is “more V-shaped, meaning a relatively short-lived dip and rebound, or a more prolonged U-shaped decline and slow recovery period,” he said.

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CompTIA’s Tim Herbert

“Industries most directly affected – travel, hospitality, restaurant, insurance, etc. – are all buyers of technology, so technology vendors and service providers could experience sales decline in the short term,” he added. “Again, it’s too early to tell if these intended purchases among U.S. and overseas customers will be postponed to later in the year, or shifted to other areas, such as upgrades to technologies that facilitate remote work or enhance disaster recovery effectiveness. The other big concern revolves around disruptions to global supply chains, which negatively impact the bottom lines of OEMs, but could potentially also lead to higher prices down the road, which hurts customers.”

As it relates to IT workers within these industry sectors, it could mean some layoffs, especially at SMBs that have fewer options to weather the storm, Herbert said. Although in situations where companies have an opportunity to leverage an online presence, such as retailers, it may increase the need for additional web developers, e-commerce and IT support staff, he said.

Recent outbreaks drawing comparisons to coronavirus, such as Zika or swine flu, appear to have had little or no impact on tech hiring, he said. The most recent example of a significant event causing a broad downturn in tech hiring was …

… the financial crisis of 2008-2009. In 2009, tech industry employment fell 4.7%, while tech occupation employment fell 2.1%.

“Because the recession was so deep, there wasn’t much tech employers could do other than wait it out,” Herbert said. “Compared to many other industry sectors, tech fared reasonably well. By 2011, tech industry employment returned to 2.6% growth and tech occupation employment grew 4.5% (annual tech employment growth has been positive ever since).”

IT pros who are in the mobile workforce will find it easier to get a new job, Janulaitis said. They already have the skills in high demand, plus they know how to find a job without going into the office.

In addition, technical experts who know the workspace of online contracting sites like Freelancer will find it easier to find a new opportunity, he said.

“As the pandemic continues, legacy IT teams will be at greater risk for displacement,” Janulaitis said. “The shift will be to a more mobile workforce. The paradigm for what an IT organization looks like and how it operates will change dramatically as the pandemic lengthens. Unless an IT worker embraces the new mobility environment, including self-development, they will find that they are in the same place as all of the people hired at the peak of the dot-com boom. When the bust came, there were no jobs available for them because they were not qualified.”

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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