The Reason Behind Tech Industry Layoffs in 2022

Despite its substantial growth over the past few years, Indonesian EdTech companies have decided to create efficiency in their body. One of the players is Binar Academy.

Binar Academy has decided to lay off 20% of its workforce, a top executive announced on Monday. This is part of an attempt to prepare for the unpredictable economic climate across the world.

The founder and chief executive officer of Binar Academy responded to this complicated issue by asserting that the firm wants to expand its core business line-up, maximize investment activity, and streamline business processes.

Layoffs in The Tech Industry

The company has not yet released the number of affected employees. However, the company has ensured that it will provide assistance and bolster the impact suffered by its ex-employees to the best of its abilities.

They are also providing opportunities for these employees to increase their skillset through the courses provided by Binar Academy.

Is The Tech Industry Fragile?

The economic slowdown is responsible for the mass layoff that has been happening in various start-ups across Southeast Asia over the past few months.

More job layoffs in the region’s tech sector are expected, according to tech investors. Now that interest rates are rising and the economy is in flux, businesses must prioritize profitability above rapid growth.

Other Indonesian companies like Zenius and JD.ID, Lummo, LinkAja, and other companies are also laying off their employees on a grand scale.

Major Economic Shift

Aside from the economic downturn fueling such layoffs, high-interest rates are also a problem for the tech industry.

Increased interest rates increase the general cost of doing business and capital. The expectation of returns for investors is also expected to rise.

Strong Investment in the Tech Industry

The downturn, however, is not all that bad. The current downturn is an excellent time for investors to identify tech companies that are doing well and invest in them.

The expected outcome of this is expected to be good in 5 to 10 years when the market is expected to recover already.

The tech industry’s foundational elements are still vital. Technology is at the center of that seismic shift, and job seekers are looking for a tech role should carry on.

Layoffs can be advantageous for companies to recruit highly qualified candidates with a great experience. Aligning with your goals, InCorp Indonesia (an Ascentium Company) extends services about HR & Recruitment to help with such needs.

Digitalization is driving Asia’s continued growth, and while this has required organizations to transform and change how they work, job seekers looking to fill tech role vacancies should carry on.

Read more: Starting a Business in Indonesia in the Digital Economy Era

Tech Workers Ready To Switch Jobs

Surveys on tech employees reveal that over half are planning to look for new jobs in 6 months. From this, it is possible to deduce that employees fear losing their power in the uncertain conditions of the job market.

However, they are hopeful of landing better roles soon. Another survey by a learning platform TalentLMS also shows that tech talents are burned out and feel stuck.

The survey results in higher resignations as employees jump ship to different industries. The primary reason is the lack of career progression and job title stagnation that urges employees to take that leap.

Managing Tech Talent

Managing tech talent may be slightly more tricky than initially expected. An individual’s talent may not lie in their current role. These talents may have the necessary skills that would allow them to excel in other parts.

Often, tech specialists and developers have this oversight as they prefer honing their tech skills and overcoming challenges rather than managing them. Although both approaches can benefit the organization, a lateral move may be the way to go.

Career progression can take many forms, such as moving around a specific tech track instead of a traditional approach to climbing the corporate ladder.

Start Smart Recruiting

Recruiting now is mainly different from how it was before. The process needs to be more inclusive as the candidates assess the organization during the hiring process.

Candidates will pay specific attention to the culture, remuneration, and prospects. Organizations should then structure the process so that candidates feel supported by the organization and feel they are highly valued even before beginning the job.

InCorp Indonesia (an Ascentium Company) also provides services on Company Registration, should it be required.