Tag: massive layoffs

massive layoffs in big tech US

3 Lessons from the Current Wave of Massive Layoffs in Big Tech

Posted on | by TeresaPenafiel | 8 Comments on 3 Lessons from the Current Wave of Massive Layoffs in Big Tech

The tech industry has experienced explosive expansion for the past ten years, but now the excitement is dimming. With companies like Amazon, Alphabet, Microsoft, Salesforce, Dell, IBM, SAP, Paypal, Wayfair, and Zoom all reporting massive layoffs in 2023, the tech industry has already seen a sizable amount of job losses. 


With approximately 313 tech companies implementing layoffs, January saw three of the biggest individual rounds of layoffs since the start of the COVID-19 pandemic.

Tech Layoffs in 2022-2023

Source: Layoffs.fyi

As we can see, what many big tech companies have been anticipating is materializing in 2023. Everyday, more and more tech workers are being laid off within a short time span. 

Lessons from the Recent Wave of Massive Big Tech Layoffs

Therefore, here are 3 takeaways from the massive layoffs from big tech companies in the US:

1. Even as heavyweights of Silicon Valley are laying off thousands of employees, companies are struggling to find and retain tech talent

“Even with the layoff climate that we’re seeing, it’s always competitive. The supply is too short for the demand,” Senior Director of TA at a software company told CBC News. 

Tech talent shortage is impacting many businesses around the US due to a poor supply that has to face an enormous demand. According to Gartner, over two-thirds of IT leaders believe that a lack of skilled workers is the biggest obstacle to the adoption of emerging technology. Although enterprises’ greater reliance on technology fosters better teamwork and increases operational effectiveness, it also increases demand for IT, data, engineering, and security talent, all of which are still in short supply.

In 2027, the global market for digital transformation is expected to reach $1.5 trillion, up from $595 billion in 2022. The ongoing investment made by businesses in enterprise software, such as customer relationship management (CRM) and enterprise resource planning (ERP) systems, as well as AI and machine learning (ML) technologies, is largely responsible for this expansion. Will there be enough tech talent to support the tech industry demand? Many say ‘no’.

2. Tech continues to be a major driver of the stock market and the economy

According to the Computing Technology Industry Association, the tech sector employs almost 9 million individuals in the United States, who collectively contribute $1.8 trillion to the national economy.

Additionally, the performance of tech stocks can have an impact on the entire stock market, particularly on the Nasdaq, where technology companies account for 50% of the index.

This means that local economies and people’s investments might suffer when Big Tech takes a hit. Since Big Tech is able to weather the majority of economic shocks thanks to its enormous balance sheets and hundreds of thousands of employees, many other industries look to it as a bellwether for decisions on corporate spending, employment, and other decisions.

3. If there is no available tech talent where you are, seek elsewhere

Tech services nearshoring is gaining momentum and frequently making it to the top of company agendas. C-level executives describe it as an efficient response to the critical IT worker shortage that will make it simple to manage the extra burden. In order to overcome the IT talent crisis, businesses that select nearshore nations as an extension of their current recruiting capabilities achieve the best outcomes.

Organizations can maintain their competitiveness by employing talented personnel who live in a cheaper place but work in the same time zone. And not only that but firms have the opportunity to choose from a vast talent pool.

Mexico, for example:

  • Mexico’s many universities offer excellent computer science, engineering and other technical degrees. 
  • Over the last 15 years, the Mexican government and cities have invested heavily in the technical education of software engineers with specialized skills in many coding languages and disciplines. As a result the talent pool in Mexico now has some of the most exceptional and experienced tech professionals in the industry. 
  • 1.3 million engineers in labor pool in Mexico as of 2020
  • 130,00 engineers graduating every year / 90+ universities / Bi-national programs

With such a tech talent supply in a neighboring country, why keep struggling? 

If you are looking for a software engineering A+ team of experts, search no more. Schedule a meeting with us!

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.

Build operate transfer model strategy for the tech crisis

Build-Operate-Transfer Model Strategy for the Tech Crisis

Posted on | by TeresaPenafiel | 4 Comments on Build-Operate-Transfer Model Strategy for the Tech Crisis

Finding your way through the current US tech crisis turns imperative right now. On one end, you’ve got the massive layoff environment where Big Tech companies are letting go of hundreds of workers. On the other end, you’ve got talent shortage issues that don’t show any signs of slowing down. For both ends, there is a common solution: Introduce the Build-Operate-Transfer model to your business strategy.

But, first:

Tech Crisis Outlook

Massive Layoffs Landscape

US technology companies, including giants like Meta, Google and Amazon, are laying off thousands of employees. In one of the worst contractions in history, layoffs at technology companies in the US reached a more than two-year high as they prepared for a potential recession by hiring at the second-fastest rate ever.

As a result, technology companies slashed over 154,843 positions last year. Furthermore, ​​technology companies have already let go of 85,200 more workers in 2023. 
In the end, businesses throughout the US are significantly reducing employment as part of their restructuring efforts to be ready for a likely economic downturn. The fact that this is merely the beginning is alarming. However, one important thing to keep in mind is the premise that tech workers who lose their jobs swiftly find new ones. In fact, published in November 2022, a research discovered that eight out of ten tech professionals who had been laid off find new employment within three months of beginning their hunt. And some are even luckier: over 40% of people who lose their tech jobs do so within a month.

Tech Talent Shortage Landscape

Let’s get one thing straight: Even though the Big Tech are letting go off a great number of workers, there is still a tech talent shortage thanks to the unmet demand in all industries. 
Leading market intelligence company IDC projects a 4 million developer shortage by 2025, while the U.S. Bureau of Labor Statistics projects that by the end of the decade, there will be a need to fill over 200,000 developer positions annually. Moreover, while there is a chance for developers to profit from a strong job market thanks to this type of employment demand and potential job stability, there is a drawback. According to Forbes, the complexity of software development jobs keeps rising, which has the unfavorable effect of counteracting the enthusiasm many developers have for their work.

What is the Build-Operate-Transfer Model?

Gartner Research describes it as a contractual arrangement in which a company employs a service provider to establish, enhance, and manage a business (or process/service/delivery) operation with the express purpose of transferring the whole operation to the company when the time comes. 

In other words, when implementing the BOT model, you are partnering up with a service provider that will come to know your talent needs and will reach out through its databases to find tech talent tailored to your needs. After your partner sets up, optimizes, and manages the process on your behalf and it’s operating well, they hand off control of the operation back to you.

Example of Build-Operate-Transfer Model in Action

In the software development landscape, let’s say firm A is a life science company in need of tech talent and developers for its new medical device development; so, firm A decides to give the BOT model a shot.

Firm A finds a service provider, firm B, a specialized company that works in building software engineering teams in Mexico.

  1. Build: Firm B gathers the team based on Firm A needs and the specialization of the developers.
  2. Operate: After both firms have come to an agreement about the specialized team, Firm B starts operating the project and performs day-to-day operations hand by hand with firm A’s involvement and instructions. Basically they started working together while firm B’s sw engineering team started to catch the pace.
  3. Transfer: Finally, after firm A considers the team provided by firm B is ready, they go through a stage by stage seamless transfer fully to firm A. They are no longer firm B’s team but firm A’s completely. Afterwards, there is an extended support on behalf of firm B.

BOT model: Keeping the Tech Crisis in Perspective

In view of the current economic state with both landscapes, layoffs and tech shortage, the idea of nearshoring comes into perspective as many organizations have just recently begun to realize its true potential.

Right now, CIOs and CTOs are putting a focus on remote work, hiring in-demand IT talent, and using AI and analytics tools to optimize efficiency gains in order to recession-proof their companies. One way to do all of this is to apply the BOT model through nearshoring. 

One of the strongest advantages of accessing a BOT model through nearshoring is that you enjoy a large and vast pool of talent. Now, you have the chance to access a genuinely global network of experts. Let’s say you choose Mexico for example: With 25% of all Mexican university graduates majoring in STEM, Mexico has one of the highest rates of engineering graduates in Latin America. Numerous Mexican colleges are among the top 50 in Latin America, demonstrating the outstanding caliber of these institutions. Furthermore, more than 130,000 engineers graduate each year summing up to a talent pool of over 700,000 tech professionals. Overall, that’s an opportunity no one would like to miss.

The build-operate-transfer model makes it possible to adjust the ‘ups and downs’ with a contract! Schedule a call with us.

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.

Massive layoffs impacting the tech industry

Massive layoffs impacting the tech industry: What can companies do?

Posted on | by TeresaPenafiel | 2 Comments on Massive layoffs impacting the tech industry: What can companies do?

Massive layoff announcements are starting to pile up across the US economy: Meta laid off around 11,000 workers, Twitter cut about 3,700 employees, Amazon about 10,000, and the list goes on. This is a side effect of the upcoming severe US recession.
As the Fed keeps raising interest rates to combat 40-year high inflation, many market observers anticipate a recession in 2023. The US GDP has decreased for two straight quarters: 1.6% in the first quarter of 2022 and 0.6% in the second. That is a recession in most nations.

Massive Tech Layoffs Context

Layoffs in the IT industry have dominated the news in recent weeks as businesses struggle with inflation-driven cost increases and dwindling income from fearful consumers cutting back ahead of a recession.

 This year’s overall number of layoffs in the United States has reached 120,000, surpassing the amount of IT professionals fired in 2001 during the Dot Com bubble.

Although there are common elements, there are various reasons why different businesses reduce staff:

1. Market Shifts

Many tech companies rely heavily on online advertisements for revenue, but the advertising industry’s future is looking bleak. Businesses are now dealing with more pushback to their invasive advertising tactics. For instance, Apple makes it more difficult to track users’ internet activities and sell that information to marketers.

2. Cutting Expenses

Investors have increased the pressure on companies to reduce expenses by claiming that they are bloated and reluctant to act when there are signs of a slowdown.

3. No More Blue Skies

There is less tolerance for large investments in high-tech bets, such as virtual reality or autonomous automobiles, that could not pay off in the near future.

Investors believe that some of the sector’s lucrative benefits and high pay are unsustainable.

In summary, companies all around the US are substantially cutting back on employment as part of its restructuring efforts to get ready for a potential economic downturn brought on by the crisis in Ukraine and the U.S. Federal Reserve’s battle against inflation. It’s concerning that this is just the beginning. Which arises the question: What can we expect from the US Recession in 2023 and how can we keep our businesses up and running?

What can companies do about the Massive Layoffs and Recession landscape?

For businesses that wish to survive the volatility and keep their investors, employees, and clients protected, economic downturn measures become essential in this situation.

IT executives are emphasizing on remote work, acquiring in-demand tech talent, and utilizing AI and analytics tools to manage supply chain capacity and optimize efficiency gains in order to recession-proof their organizations.

Furthermore, what would be a good way to prevent negative effects of the 2023 recession on your tech company? Consider nearshoring. A nearshoring strategy allows companies to stay competitive by hiring qualified talent in the same time zone, but living in a lower-cost location. In fact, by building competent teams, saving businesses valuable time and recruiting resources, and establishing sizable, high-performance centers for software engineering, ITJ supports rapidly expanding and high-value industry areas.

Now, where to look?

Mexico. The Cali-Baja MegaRegion, which is brimming with possibilities, would be a great place to start your search. Find a good and close location. The strategic location of Tijuana, which is about 35 minutes south of downtown San Diego, enables enterprises to operate in the thriving border economy and enhances contacts between Mexican and American industries. One of the biggest population densities along the US-Mexico border is in Cali-Baja. The region has remarkable qualities for moving global and binational corporate investments due to its unique cross-border integration and IT/Software development, as well as its transnational culture and high-end binational talent pool.

Nearshoring is the solution for maintaining control in the unpredictable environment the US is going through. We recommend reading about How to choose your nearshore provider, to continue your research.

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.