Businesses in the IT sector expect to let go more staff than they hire for the first time since 2020, according to the latest ManpowerGroup Employment Outlook Survey.
Hiring optimism in the tech sector has declined in response to slower than expected growth and preparation for continued business stagnation in the New Year.
However, the survey also shows that 90% of businesses in the IT sector are having difficulty finding candidates with the skills they need.
This is up 11% year-on-year with a low supply of specialist skills driving the shortage.
The ManpowerGroup Employment Outlook Survey is based on responses from 420 employers across Ireland and asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter, January to March.
“Ireland’s tech sector has entered a period of contraction following a period of significant over-hiring.” said its Managing Director John Galvin.
“Tech companies, especially multinational software companies, have had to respond to slower than expected growth and reducing global demand.”
“Most of these redundancies have been mid-level business support roles like HR and customer experience, hired in anticipation of massive growth which did not materialise in 2023,” Mr Galvin said.
The tech sector downturn is most pronounced in Dublin, where IT employers report a net employment outlook of -20%, down from +53% two years ago.
ManpowerGroup said it continues to see vacancies for specialist, high-skilled tech roles like cloud architects, cybersecurity specialists, developers and data engineers, where employers are still looking to fill vacancies despite the wider downturn.
Other industries have a more positive hiring outlook such as healthcare and life sciences, communication services, and transport, logistics and automotive.
Each of these sectors also reported a shortage of talent, making optimistic hiring intentions difficult to turn into filled vacancies, ManpowerGroup said.
