In the last year, two major topics have stood out in the agenda of software industry professionals and software developers: the future of artificial intelligence and layoffs in the software field. In this article, we will take a detailed look at the reasons and effects of these crises experienced in the software industry, focusing particularly on the topic of layoffs.
An Unprecedented Stagnation in the Software Industry
Since 2004, the software industry has witnessed stable growth. The emergence of new technology needs and digital transformation processes have kept demand in the sector consistently high. However, as of 2023, particularly over the last year, we have observed a slowdown in this upward momentum. Hiring has come to a standstill, and software companies prefer to maintain their existing workforce rather than create new positions.
One of the main reasons for this stagnation is that technology companies created overly inflated staffing during periods of rapid growth. Companies that quickly expanded to meet increased demand during the pandemic can no longer sustain this growth and are readjusting their employee numbers. Additionally, the poor strategic decisions of some tech giants, which have led to a decline in profitability, are among the factors triggering this stagnation.
The Impact of the Global Economic Crisis
A major economic crisis is currently unfolding worldwide. The main reasons for this crisis include:
Regional Wars: Regional conflicts such as the Russia-Ukraine war and the Israel-Palestine war are affecting not only their respective geographies but the entire world. The rising energy prices and disruptions in the supply chain directly impact all sectors, including the software industry.
Local Issues: Turkey is experiencing serious economic challenges in 2023 due to events like elections and a major earthquake disaster. Increasing inflation and fluctuations in exchange rates weaken the international competitiveness of local software companies. Economic uncertainty prevents companies from taking new risks, which both increases layoffs and restricts new employment opportunities. The rising inflation rates and declining consumer confidence globally have particularly caused significant difficulties for the startup ecosystem in attracting investment.
Changes Following the Pandemic
During the pandemic, the software industry gained significant momentum. E-commerce, online ordering applications, remote work tools, and the gaming sector experienced their golden ages during this time. However, when the pandemic ended, companies had to return to their old structures and make major layoffs due to a decline in demand for these applications.
For example, companies that received significant investments due to a peak in demand for remote work tools during the pandemic faced large financial losses as user numbers decreased after the pandemic. As a result, companies primarily operating in these areas significantly reduced their workforce. Moreover, many startups struggling to adapt to the post-pandemic world went bankrupt during this period.
The Influence of Artificial Intelligence
Another much-debated topic is whether artificial intelligence will reduce employment in the sector. While artificial intelligence makes the work of programmers easier, its impact in the current economic downturn is estimated to be only about 5%. However, it should not be overlooked that artificial intelligence could play a larger role in the software industry in the future.
For instance, AI-powered code completion tools may increase a developer's productivity while allowing companies to do more work with fewer employees. This situation could particularly lower the job prospects for entry-level software developers. However, there are indications that more time is needed for artificial intelligence to reach its full potential. Software companies can facilitate this transition more smoothly by providing their employees with the necessary training to adapt to new technologies.
What Should Software Developers Do During This Period?
Here are some measures that developers can take during this challenging time:
Be Cautious When Changing Jobs: Before moving to a new company, research the company's economic resilience and its situation in a crisis environment. Also, strive for open communication regarding long-term plans and the company's financial status during job interviews.
Focus on Freelance Projects: Create an additional income source by taking on projects as a freelancer. You can particularly earn in foreign currency by working on global platforms.
Startup Ideas: Develop micro startup projects that can generate revenue. Projects that offer simple but effective solutions may carry significant potential during crisis periods.
Keep Expenses in Check: Manage your expenses carefully during economic crisis periods and make savings plans. Be particularly cautious when investing in training and certification programs; avoid unnecessary expenditures.
Embrace New Technologies: The best advice we can give is likely this. Enhance your software skills by focusing on rising technologies such as cloud technologies, artificial intelligence, and blockchain. Expertise in these areas could position you more advantageously in the industry in the future.
You should keep your ears open for innovations and opportunities in the sector. A single week lost in the software world can bring about hard-to-catch innovations. To avoid missing opportunity windows, you can follow PlusClouds’ blog and social media accounts.
Is There Hope for the Future?
It was predicted that 2024 would see stagnation in the sector. However, starting in 2025, a revival of both the global economy and the software industry is expected. Still, it might be difficult to recapture the golden age between 2018-2023.
The software industry possesses great potential despite all these crises. During this process, it is possible for developers to overcome these challenges by developing themselves and focusing on different projects. The future of the industry will depend on how quickly lessons learned from these crises and innovations are adapted.
Moreover, there are significant lessons that governments and industry leaders can learn from these crises. Transitioning to more sustainable growth models may reduce uncertainties in the sector. The software world has faced many challenges in the past; we believe it will overcome this period with innovative approaches.
