There are massive cuts in the IT sector. What you need to know
There is a tendency in the global economy to reduce the number of employees in IT companies. Both large corporations and start-up startups are abandoning the bloated staff of specialists. Ironically, one of the reasons for this was the development of artificial intelligence and the automation that followed, which makes it possible to optimize processes without the participation of employees. How the IT labor market works now and what awaits it in the future is in the Izvestia material.
What are the volumes of cuts
• Layoff portal.fyi, which is calculating cuts in the field of information technology, announced the latest data on layoffs for 2025. According to him, in less than two quarters, companies around the world have reduced more than 52 thousand employees. The layoffs from 123 companies that could be identified based on open data were taken into account. The largest reduction in 2025 was made by the processor manufacturer Intel, which plans to lay off 22,000 employees, or about 20% of specialists.
• Last April, with almost 25,000 layoffs, was the worst month for IT specialists since August 2024, when the cuts slightly exceeded 25,000 people. At the same time, in the perspective of recent years, these are still not the worst indicators — in January 2024, 34 thousand employees were laid off. Throughout 2023, on average, 22 thousand specialists were out of work every month, while in 2024 - 12.7 thousand.
Why are there reductions?
• There are several trends in the IT employment market right now. The first one is related to the fact that for a long time investors have been betting very heavily on information technology. They hoped that investments in this particular area would bring the greatest return on invested capital. There was a huge influx of funds, a large number of new companies were created, but not all of them turned out to be in demand and profitable. Some of them went bankrupt, which leads to layoffs and the return of employees to the free labor market. The same applies to the structures of large IT holdings, which close individual projects and slow down development against the background of a reduction in global economic activity. Investors are no longer ready to invest in risky startups, but prefer the conservative real sector.
• At the same time, the development of automated technologies is accelerating, which is often also associated with artificial intelligence, although this is a broader concept. They automate simple tasks and processes that previously required individual specialists, even without serious qualifications and experience. For example, if earlier a team of developers was required to create a website, now there are peculiar designers who, due to automated algorithms, reduce the need for personnel. In addition, the actual implementation of the terms of reference will be of higher quality, since its interpretation will not be subject to the human factor.
• Both of these trends largely affect the state of the labor market, and in different proportions — the first is responsible for about 70% of the cuts, and the second for all the others. Experts note that for this reason, it is more correct to characterize the current state of the employment market not as cooling, but as normalization — the reductions are not due to the decline of the industry, but because of the reached limit, to which it can in principle reach, while maintaining economic viability. At the moment, it cannot be said that it is the artificial intelligence created by the developers that becomes the reason for their dismissal.
• However, this will be the case in the near future. The IT industry will achieve the necessary balance and stop getting rid of unnecessary specialists who have arisen due to the investment boom, but the automation processes in it will continue and will only accelerate. Experts believe that within two years there will be a trend in which IT specialists will begin to massively replace their own technologies. First of all, low- and middle-level employees will be at risk.
How are things in Russia
• In Russia, large IT companies and banks that form ecosystems are beginning to significantly slow down the recruitment of new staff, and in some cases, make cuts. This also results in a slowdown in salary growth, and in a number of positions, in their reduction. There is no longer a situation in the IT sector where there is a real hunt for valuable employees. But these processes in Russia are almost unrelated to automation — the domestic labor market is mainly affected by the abandonment of unprofitable projects and the reduction of investments, which are no longer enough for various kinds of experiments. Employers hire as many employees as they need to solve specific tasks, not to create a foundation for future projects.
• Russia is separately characterized by a sharp increase in the supply of junior and novice employees without experience, the so-called juniors. Many specialists who completed online training entered the market at a time when the IT industry was at its peak. However, now they are unclaimed, even if they have sufficient qualifications, since employers value experience first and foremost. Competition is growing between them, which frees employers' hands and allows them to make cuts.
• In addition, the Russian IT market is characterized by an excessively wide geography that goes beyond Russian borders. Often, specialists living in the CIS countries and neighboring countries tend to work in Russian companies. However, employers value specialists who are physically located in Russia. Financial companies and large corporations, especially those associated with the military industrial complex, do not want to bear the risks associated with the residence of specialists abroad. So even with the current outflow of labor, there may still be demand for those who must work directly on critical infrastructure facilities without remote access.
When writing the material, Izvestia interviewed:
- Pavel Myasoyedov, technology expert;
- HR expert, head of the Amalco recruitment agency Garry Muradian.
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