How the unemployment rate has affected the IT industry
The economy is falling and falling due to the coronavirus pandemic, but how has it affected the information technology industry? The answer is complex. Certain areas are being affected in a negative way. If one were to look at this side of the field, the answer to that question would be simple: it’s tanking like the rest of the economy. But certain areas of the IT industry are doing well and even thriving, so the answer to the question could be “The industry is improving despite the crisis.” So where do we need to look to see the bad, the good, and the entire picture?
The coronavirus pandemic has negatively affected almost every industry in the United States. Information Technology is no different. By the end of April, the technology job layoff/loss total swelled to 119,000 jobs according to CompTIA’s analysis of employment data by the U.S. Bureau of Labor Statistics. This is the biggest loss ever in this span of time in the industry. Too many jobs are being lost and automation is increasing for many companies across the country in order to help combat the loss of so many important jobs in the technology sector in the United States. While the number of jobs lost is very high, it takes into account less than 1% of the technology jobs held in our country today.
Most of the jobs lost were service related due to third party IT companies relying solely on providing IT services to businesses. This does make sense because these businesses have been shut down or running on a fraction of what they are normally running on. With the decrease in revenue, businesses will have to cut costs somewhere. Usually they will cut sales, marketing, and third party assistance companies which IT falls under. Companies that typically have their own IT departments will not cut the department because, in a time like this, they need it to run the business remotely and make sure communication chains are rock solid. Despite these negative effects from the pandemic, there are some positives to take away.
Some companies have thrived during this pandemic and the information technology field, in some aspects, is thriving and growing. Amazon hired 100,000 warehouse workers to meet surging demands for products and services they offer. Facebook’s messaging and video calling services have exploded, and Microsoft is seeing a 40% increase in software for online communications and collaboration. Due to so many people being at home, tech companies are seeing a huge need for their services to help businesses continue to run. Trends were already swinging towards this happening, and the pandemic threw companies into a craze for the services they offer. This has resulted in a huge increase for companies that provide services in communication and collaboration tools, cloud computing services, and digital services.
Streaming services like Netflix, Hulu, YouTube, and Apple Music are also reaping the benefits of the pandemic. More people are at home constantly and are looking to all of these platforms to keep them entertained. But this doesn't mean these companies are not feeling the impact of the pandemic. Stock prices for Apple, Netflix, and Microsoft are all down significantly over the past month.
The long-term growth for tech companies could be stronger than ever after the pandemic. Amazon has struggled to get people to order groceries online before this and now it is becoming the norm due to people wanting to stay home. People could continue to rely on Netflix, Hulu, and Apple Music for entertainment more than they did before the pandemic. During this time, people are creating habits that may stay with them after everything is said and done. This can help the technology field grow in the long run and, for now, weathering the storm is the best that any industry can do.
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