Upended by COVID-19, job market for tech craters

There was a time in the not-so-distant past that the acute shortage of skilled engineers in the U.S. left tech companies scrambling to find qualified candidates to fill open positions. Furloughing or laying off engineers would have been virtually unthinkable.

Now, COVID-19 is upending everything.

Postings for tech jobs have seen a precipitous decline in recent weeks, following a similar trajectory for restaurants and retail.  While postings are down for engineers and other jobs, overall first-time jobless claims reached 6.6 million for the week ending April 4 for a total of 16 million over three weeks, according to the U.S. Labor Department. *

“We started to see a drop off in total job postings starting the week of February 23. For several weeks afterward the demand for tech workers remained strong at around 880,000 job postings, especially for positions requiring certain types of engineering skills,” said Julia Pollak, labor economist at ZipRecruiter. “But starting the week of March 9 the number of tech job postings have come down each week and trend is continuing.”

The four-week drop in tech jobs overall on ZipRecruiter is a sobering 17%, with some sub-categories faring better than others, said Pollack. Software-related jobs are down 15%, while electrical engineering jobs declined by 14%. Jobs for hardware design engineers were even harder hit--down 26%.

Hosting a daily average of 9 million job postings in 2019, changes in ZipRecruiter’s database is a good indicator of the entire U.S marketplace and the economy in general. “As employment demand falls, we see less hiring and we also tend to see layoffs and furloughs go up,” said Pollak.

To wit, at the end of March, Bevi, an MIT spin-off which makes smart water dispensers for offices, laid off more than 30 employees, according to Bostinno. CNBC reported that Rocket maker Astra shed 30 of its 150-person workforce. And ZipRecruiter itself cut back nearly one-third of its staff in that same time frame, according to the WSJ.

The impact of the pandemic has been particularly challenging for young tech startups, which have not yet become profitable and are still working on expanding market share. But Pollak said that many larger tech companies also have been impacted by the overall reaction of business to the pandemic.

“As they see their revenues fall or become unpredictable, companies everywhere are looking to cut costs—whether that is by cancelling subscriptions to software or services, not making that big capital investment in technology, or foregoing the building of a new facility. That's less revenue for the companies they were doing business.”

Exacerbating the situation, she continued, is that companies tend to overreact when revenues are down--cutting back more than the actual decline might merit in order to buttress against any further declines.

But what about all those jobs on the site? Pollak noted that many tech jobs that were posted in the fourth quarter of last year, simply no longer exist as companies have had to change their hiring plans dramatically. To that end, the site has added a banner to job postings for a company to flag the fact that it is "Actively hiring during COVID-19." Job candidates can also sort postings by date, the assumption being that a recent job posting reflects an immediate hiring need.

As to when the tech job market could turn around, Pollak doesn’t see it happening anytime soon. “Hopefully towards the end of the year we will see a reopening of the economy and hiring will begin to start back up, although companies will do so with caution,” she said.

On the upside, Pollak noted that demand for engineers who can help companies do things more efficiently is strong during downturns, although job hunters will likely need to get creative in their networking to find those opportunities. Opportunities for engineers with specialized skills will also crop up.

A case in point, she pointed to the current, urgent need for programmers fluent in COBOL. According to The Hill, the state of New Jersey’s IT department is looking for volunteers to maintain its antiquated mainframes, stressed under the avalanche of recent unemployment claims.  

For opportunities that come with a paycheck, over 200 jobs requiring COBOL experience have been posted to ZipRecruiter in the past ten days.

* Content updated with Thursday jobless claims.