Ireland is beginning to feel the hint of a chill wind from the hiring freezes and job cuts that are sweeping the US tech sector .
ompanies that saw demand – and valuations – soar during the pandemic are now coming back down to earth to face the reality that the glory days may be over.
From Apple, Netflix and Spotify to Oracle, Meta and Microsoft, few companies have avoided belt-tightening as economic uncertainty, and a speedier than expected return to pre-pandemic habits, put an end to continuous recruitment.
And Ireland’s multinational-dependent tech sector has not escaped either.
“Tech used to be growth at all costs,” said Gareth Fleming, Brightwater Recruitment commercial director of IT.
“Now it’s ‘do we need to grow? Where do we need to grow? What is sustainable growth?’”
Mr Fleming said the Irish market was already seeing localised hiring freezes and layoffs, mostly among the multinational employers. In May, PayPal cut over 300 jobs from its operations in Dundalk and Dublin.
“[Layoffs and hiring freezes] tend to be within the big pillar companies that increased head count massively,” he says. “If you filter it down to SMEs, indigenous companies, you’re not really seeing those layoffs.”
Tech companies in Ireland are also looking at less-expensive ways of bringing people on board, such as relying on contract work instead of hiring for permanent positions, said Recruiters.ie associate contracting director Sarah Pope.
“We’d hire a lot of project managers and business analysts,” she said.
“There are also tech contractors, tech developers and web developers. They might outsource a customer support department and engage with us for staffing that.”
It’s a big change from the pandemic when many tech firms hired at a rapid rate to meet steep demand that they anticipated would continue long after Covid’s grip on society loosened.
“It’s been so intense over the past year, year and a half, in terms of the speed and the pace in which they have been recruiting,” said Ms Pope.
However, this confidence proved to be unfounded as demand has reverted to pre-Covid norms. As Shopify CEO Tobias Lutke wrote in a memo to staff: “It’s now clear the bet didn’t pay off.” The company is now laying off around 10pc of its global workforce as a result.
However, it is not all doom and gloom in the Irish tech sector either.
“Ireland, now as a tech landscape compared to ’07, ’08, we’re in a really different place. We are a much more mature tech market,” said Brightwater’s Mr Fleming. “We are a go-to location for investment and start-up companies looking to scale.”
Venture capital funding also remains active in Ireland, although investment slowed in Q2 to $207m from $401m in Q1, according to KPMG.
Meanwhile, hiring is still happening but at a more focused pace.
While areas such as talent acquisition, sales and customer experience have been targeted for layoffs, others remain in demand such as software development, data analytics and cybersecurity.
