Layoffs are not impacting IT Job market

Focus of layoffs is on non-technical positions and the elimination of administrative overhead

Security ManualPark City, UT – Janco Associates, Inc. – Janco reports that November saw an increase in the number of new IT jobs created. Most of those positions were non-management positions. 12,500 new IT jobs were added to the November IT job market with an additional increase by the BLS of 3,00 jobs for the prior two months.

According to the latest BLS data, analyzed by Janco, there are now just shy of 4 million jobs for IT Professionals in the US. For 27 months in a row, there has been an increase in the number of jobs added to the IT job market. Janco sees this trend continuing but at a slower pace. Layoffs will continue as companies seek to improve productivity levels.

Janco has increased its November forecast for 2022 IT job market growth slightly to 190K from 188K in its forecast last month. That will be less growth than in 2021 but still at record-high levels.

IT Job Market Growth Forecast
Latest YTD IT job market data - IT job Market Growth in Q1 2024 out performed Q1 2023 and the start of Q2. Note - In the current reporting period the BLS has reduced the number of jobs create by 14,100 and reported a growth of only 400 jobs. The adjustments make the number of jobs created in May insignificant at best and significantly over stated at worst.

IT Job Market - May 2024

IT Job Market Forecast
There has been a major shift in the creation of new IT Jobs - AI and economic slowing are the drivers. The IT Job Market shrank by 48,600 jobs in CY 2023 and that trend is continuing in CY 2024.

The CEO of Janco, M. Victor Janulaitis said, “Based on our analysis, the IT job market and opportunities for IT professionals will continue to be positive but not as broad in scope as in the first three quarters of this calendar year. CIOs and CFOs are looking to improve the productivity of IT. They are focusing on eliminating “non-essential” managers and staff. They will continue to hire coders and developers. The highest demand continues to be for programmers, blockchain processing, and security professionals. There still are over 200K unfilled jobs in the IT job market”

He said, “CIOs and CFOs see dual challenges of Inflation and an economic downturn. Work from home is slowly being minimized as companies are requiring employees to be in the office at least 3 to 4 days a week. Companies are reluctant to hire replacements at salaries that are significantly higher than those who left. In the 2023 salary budgets for IT pros, CIOs are trying to address the inflationary pressures faced by employees. We believe that starting salaries for IT Pros in 2023 will be 6-7% salary above existing levels. Salary compression has occurred from the earlier hiring efforts with new employees being paid more than existing employees. That has impacted existing employee morale. On the plus side, the move by companies in all industries and sizes to improve productivity by laying off excess staff will not impact the short-term demand for programmers and developers. “ The CEO added, “ Companies are looking to increase the span of control (number of people who report to each manager and supervisor) of those in middle and upper management  who remain and are focusing on reducing the number of layers of management between the top IT executive and the lowest level of workers.”

Janulaitis said, “Many of the issues faced by the economy are due to supply chain problems. If China opens, overall supply chains should improve but will take several months. That should lessen the recessionary pressures that are driving companies to reduce staff.”

The CEO added, “In our Mid Year 2022 IT Salary Survey, we have found IT salaries for existing IT staff and middle managers increased by just under 3% while new hires were paid 5-6% more than existing staff. In conversation with several CIOs, we observed that starting pay rates for new hires were in the 8-10% range a few months back, but this is not the case currently.”

Janulaitis said, “CIOs and CFOs now are more cautious than they were in the first three quarters of the year. CIOs do not yet have a clear understanding of how a downturn will impact their bottom line. Most still are hiring but at a slower pace. With all that, the IT job market remains tight with an average of 200,000 IT professionals' jobs that are not filled due to a lack of qualified candidates. (NOTE - late reporting by the BLS on number of openings shows a drop of 100K IT jobs) The number of unfilled IT jobs has peaked from over 260K in April to close to 200K in November. That should still be enough of a buffer to keep hiring IT pros on a positive track"

Job Openings for IT Professionals

IT Job Market Openings

Openings for IT Professionals

A major pullback of the number of excess jobs for IT Pros occurred in the 4th quarter of 2022 and continued through last quarter of 2023 - economic slowing and resulting layoffs have impacted on number of unfilled jobs available for IT Professionals. In December the number of unfilled jobs for IT Professionals fell.

In May there were 129K unemployed IT Professionals with an IT Unemployment rate of 4.7%

Unemployed IT Professionals

Janco is an international consulting firm that follows issues that concern CIOs and CFOs. The firm publishes a series of IT and business Infrastructure HandiGuides® and Templates including IT Infrastructure Policies and Procedures, Disaster Recovery/Business Continuity Template, Security Template, IT Job Descriptions, and its semi-annual IT Salary Survey.