Uncertainty in the Job Market as the Tech Sector feels the Crunch

MARK O’ROURKE BUSINESS CORRESPONDENT

For the last three years, a present feature of life thanks to COVID-19 is uncertainty. While the worst of the pandemic may be behind us, uncertainty remains and, unfortunately for students, spread to the job market. For the last decade, the tech sector stood as the cornerstone of the Irish job market. According to Davy stockbrokers, the Big Tech multinationals headquartered in Dublin employ 12% of the capital’s workers. In recent years, the tech sector has become incredibly attractive and an important employer for UCD graduates.

However, the past months brought a string of announcements about job cuts from Tech Giants such as Stripe, Microsoft, Salesforce, Meta, and Twitter which all have their European headquarters in Dublin. Hiring freezes have also been announced as tech companies scale back on the optimism of the past years.

While the full extent of Irish job losses in these companies and the various others remain to be seen, the announcements are an indicator of the changing fortunes of the sector.

The tech industry was one of the major beneficiaries of the pandemic, experiencing unprecedented growth as life moved online. However, post pandemic the relentless growth experienced by the sector is starting to slow down and, amid rising interest rates, companies start- ed reducing employee numbers in a bid to cut costs and protect their positions.

Job loss announcements from Stripe and Meta included an admittance that the companies had over-hired and failed to anticipate the slowdown in growth levels post pandemic. However, external factors are also at play as companies across all sectors grapple with higher costs, war in Ukraine and difficult economic conditions.

The announcement of job cuts will come as unwelcome news not only for the employees affected and their families, but also for students, particularly in the later years of their degrees, who are beginning to look at the job market and life after college. For many years the tech sector has been a huge graduate employer, providing lucrative employment in a growing market.

The announcements have come as a wake up call. The Irish job market and economy are heavily reliant on Big Tech companies and multinationals in general. Figures from the Department of Finance indicate that Big Tech companies, along with pharmaceutical companies, make up more than half of corporate tax revenues which this year reached record levels. Additionally, tech workers account for 6.5% of all jobs in Ireland and contribute 10% of income tax revenues. Additionally, countless workers in professional services firms and other industries benefit from the strong tech sector presence in Ireland, and the declining fortunes of the may have broader ramifications across the economy.

Uncertainty for Students

The recent tech sector job losses have added to the uncertainty for students emerging into the job market. The Irish economy shows signs of resilience in the wake of the difficulties posed by rising energy costs, interest rates, and cost-of-living. However, as mentioned much of the prosperity of the Irish economy is tied to the tech sector and any inkling of trouble in this area is naturally a cause of worry.

Initial assessment of the job cuts indicates that it represents a pause on growth in the tech sector rather than a complete reversal. The full extent of the impact these job losses can have and whether or not there are more to follow is unclear. While the long-term effects are unclear, in the short-term graduates will find themselves emerging into a much less welcoming job market than the graduates in prior years. Other sectors will pay heed to the experiences of the tech sector, and 2023 will perhaps see a much more cautious approach than prior years, leaving uncertainty in the labour market one further thing graduates must contend with.