Already in 2023, they received messages at board and stock exchange level about the global trend of shifting commercial and operational jobs and processes to Asia due to rising labor costs in Central Europe. Perhaps, had it not been for the war on our eastern border, the Ukrainian labor market would have benefited most from these changes. Let's remember that the first optimization decisions in the IT industry were made already in 2022: then there was talk about reducing the level of employment during the pandemic. The following year saw a radical tightening of the belt and everyone in the industry no longer had any doubt that the trend of radical transformation in IT would continue in the following year.
Despite everything, we do have some dark series. On the same day as Aptive Services, Infosys, one of the largest entities in the IT industry, fired 200 people from its Poznań branch.
Infosys has the strongest connotations with India in terms of capital. It is possible that this is a strategic part of the trend that I mentioned, i.e. the so-called Offshoring the simpler ITO and BPO operations to Asian countries that offer qualified graduates from technical and economic universities, fluent in English, highly ambitious, motivated, and paid much lower than their colleagues in Europe.
Let us remember that the annual increase in labor costs and the high cost of standard non-wage benefits in Central Europe have led the business level to question the necessity of bearing the full cost to the employer, which amounts to about PLN 10,000. PLN for the person who enters invoices and monitors payments in the SAP system. In addition, there are high costs of offices, technical and administrative infrastructure. Thus, a trend that was reversed by investments in our region over a dozen years or so ago is beginning to return, namely access to much cheaper specialists from Asia, and thus the migration of business and technological processes.
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Will there be more layoffs?
I'm afraid so. We already have two major waves behind us: the first, after Covid-19 in 2020, and the second, resulting from rising interest rates in 2022. Today, it is clear that the technological revolution driven by artificial intelligence has left the industry no choice. This year, another 32,000 people were canceled in the United States alone. Jobs are in the technology sector, and giant companies such as Snap, Microsoft and others announced cuts of 7-10 percent. Many projects have also been frozen or cancelled. This will severely impact the gaming industry, but also, as we've noticed since last year, The trend of dynamic development of e-commerce technology did not continue, and here very large projects were frozen, which led to layoffs.
Will shared services centers be closed?
Over the more than twelve years of the existence of these centers, Poland has educated a whole generation of specialists who have managed to develop in this market, but we have become too expensive for operations such as entering invoices into the system.. Therefore, today there is a big discussion in the industry about how to acquire complex business and IT processes that are strategic for Poland, which will require higher competencies and are more expensive, so as not to completely lose these specialists from the country with the loss of shared service centers to Asia. This is very important, firstly, because moving it completely to Asia poses a risk to the quality and continuity of the business, and secondly, we have many people who are willing to take on the relocation of more complex operations. This is what we have to fight for.
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What is optimistic is that there are still safe areas, such as cybersecurity, where there will still be a feeling of incompetence. The demand for professionals in architecture, development, testing and AI security is certainly increasing, so new jobs will also open here and there will be many vacancies to be filled.
However, the IT bubble is bursting before our eyes.
definitely. This is an effect similar to the very painful and long-lasting social collapse of the real estate market after 2008. This is not a dramatic decline of an era, but simply a great technological revolution – like the industrialization of the past – that will radically fulfill the demand for specific skills and the supply of efficiencies.
What does recruitment look like? Has the attitude of IT staff, who were previously pampered, changed?
Yes, we can see clear symptoms of this: a change in expectations towards the employer – the tendency to consider mainly stable offers, in a safe working environment, in an organization with strong resources and a development strategy. We see a reluctance to change jobs or projects solely because of high risks and general risk aversion. The potential risks are acceptable when looking for an employer that has the option of learning new techniques in the field of artificial intelligence. We also observe lower demands and less willingness to negotiate rewards.
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What else would IT employees want to accept more of? Back to the offices? Less money?
We are seeing more and more desire to work in a hybrid model, not just a remote model High-level specialists or with unique competencies still feel that they are in a position to negotiate terms assertively. We clearly see a trend towards accepting the ranges suggested by the employer without trying to raise expectations. This is especially true for specialists who do not have a good knowledge of the English language and therefore cannot freely apply for a place in international teams.
What specialties can feel relatively safe, and who has anything to be afraid of?
in my opinion HR departments in the widely understood field of talent acquisition and recruiting should be afraid, because layoffs in the industry are about 30 percent related to hiring departments. It's not talked about out loud, but this group has been incredibly affected by layoffsIn addition, changing industries and the decision to remain in the profession may, for many, mean a return to employment in production positions in industry and logistics.
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However, for IT professionals, development in many specific technologies will be crucial, and the professionals will definitely be safe in the next few years. AI is certainly such a technology – from automating complex workflows to personal interactions with customers. Likewise, the Internet of Things (IoT), the so-called Internet of Things, which connects billions of devices to the network. The next chapter of the technological revolution is certainly ahead of us – quantum computing, which is considered one of the most groundbreaking IT trends of the future, capable of fundamentally pushing the boundaries of traditional computing technology. Other future technologies include: edge computing – the path to decentralization of data processing – and 5G. The latter, although it has been a trend in IT for a long time, will continue to develop in 2024. The high-speed network is not only the next step in the development of mobile communications, but also a giant leap that can profoundly change society and the economy. We identify these technologies with advances such as driving autonomous vehicles or remote surgery.
Is it true that Polish programmers increasingly working for foreign entities are leaving the country, being replaced by IT specialists from Ukraine and Belarus?
Yes. Given the current situation on the Polish market, programmers and other IT industry professionals, and not only them, are looking for opportunities for direct cooperation with entities from the EU, USA, Canada and Israel. However, I would not overestimate the influx of Ukrainian specialists to Poland, because they understand well where the wind is blowing and participate in the global labor market to no less degree than the Poles.
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What can we expect in the IT industry this year?
This year, the startup Layoffs.fyi shared some interesting data with us. Its founder, Roger Lee, like some other forecasters, claims that layoffs this year will be smaller and more targeted than last year. There is some inertia in the Polish market, where optimal financial decisions are currently being implemented as of the last quarter of last year. Although economic factors are considered the main reason for layoffs in the technology industry, let us pay attention to the fact that many companies are shifting their resources towards the AI race and want to hire the best talent in this field. Therefore, even if job cuts continue, it is possible to create new jobs in other areas.
Echo Richards embodies a personality that is a delightful contradiction: a humble musicaholic who never brags about her expansive knowledge of both classic and contemporary tunes. Infuriatingly modest, one would never know from a mere conversation how deeply entrenched she is in the world of music. This passion seamlessly translates into her problem-solving skills, with Echo often drawing inspiration from melodies and rhythms. A voracious reader, she dives deep into literature, using stories to influence her own hardcore writing. Her spirited advocacy for alcohol isn’t about mere indulgence, but about celebrating life’s poignant moments.
