The wave of tech job redundancies sweeping the United States has started to affect the employment prospects of MBA students hoping to enter the industry when they complete their degree, according to a new survey of business schools.
The survey of nearly 90 member schools by the MBA Career Services & Employer Alliance (MBA CSEA) showed volatility in the normally reliable tech sector had impacted the employment outlook for current MBA students at more than 80% of schools.
Nine per cent of business schools said the layoffs had ‘Significantly’ impacted employment prospects while 73% said it had ‘Somewhat’ impacted prospects. Only 18% of schools said the lay-offs had no impact at all.
The effect has been similar for specialised master’s students with 51% of surveyed schools saying they have been somewhat impacted, 15% said significantly, and 34% said not at all.
More than 94,000 workers in US-based tech companies (or tech companies with a large US workforce) have been laid off in mass job cuts so far in 2023, according to a Crunchbase News tally.
Software company Microsoft, Google’s parent company Alphabet, Mark Zuckerberg’s Meta, IBM, Salesforce and Amazon have been among those cutting workers loose.
Last year in the US, more than 140,000 jobs were slashed from public and private tech companies as they were forced to confront rising inflation and a tumultuous stock market.
Australian tech businesses have not been immune with some of the biggest names in the local sector announcing large redundancies in recent months as they adjust to capital and growth constraints.
Despite the dire headlines, the employment outlook for the local tech industry looks strong.
Last August, the Australian Government and the Tech Council of announced that by 2030, Australia would create 1.2 million tech jobs. As of then, tech was equivalent to Australia’s seventh largest employer and those extra people would be needed to join the workforce to meet projected growth.
“Australia will need an additional 650,000 tech workers by 2030 to meet the 2030 target,” said Minister for Industry and Science Ed Husic at the time.
UNSW Business School Head of School of Information Systems and Technology Management Professor Barney Tanat said job cuts by the big tech companies were a bit of a knee-jerk reaction.
“From a longer-term perspective, the fundamentals of the tech sector needing more workers remain sound,” he said.
“This is because we are likely to see the tech talent from these large tech firms move to other areas.”
So where will all the tech workers go, and how will this big shake up impact Australians who subscribe to services from these big tech companies? And are these layoffs a foreshadowing of an impending recession?
“Most of those that have done the big layoffs are companies that have experienced phenomenal growth during COVID-19, which led to an increase in the demand for online services,” he said.
“Today, a confluence of number of factors is behind the current situation, which includes over-hiring during the pandemic, a slowdown in demand for their services post-COVID, rising inflation and interest rates, and an uncertain economic landscape where downturns are becoming more possible.
“I think the main implication is that there is going to be a redistribution of tech talent. The large tech companies have been the employers of choice, and these companies had the resources to over-hire during the pandemic when demand for their services are through the roof … while everyone else was finding it difficult to attract tech talent.
The need for tech talent has not gone away, so it is just a matter of the talent pool trickling down to other organisations like start-ups and businesses that might have considered themselves non-tech, but nonetheless, need tech workers.”
