AR & VR

 After years of global economic growth led by the technology sector, the first signs of a slowdown in the rise of IT companies appeared in 2022. Post-COVID syndromes related to digitalization of businesses and work from home created new opportunities for technology corporations, leading to a significant increase in demand for specialists. Now that economic growth has slowed significantly and inflation has not yet been tamed, the management of most IT companies are cautious about cost management, and this approach extends to the hiring of new personnel, as seen from the new and higher requirements for employees.

A number of international companies, including Microsoft, Google, and Amazon, have cut a significant portion of their staff at the end of 2022 and the beginning of 2023 due to the changed economic and business environment. After the COVID measures were lifted, many employers approached their home office policies more strictly and asked their employees to return to the office. This led to an inevitable decline in demand for some software solutions and services offered by technology giants. Additionally, it is important to note that inflationary levels have firmly tied the pockets of ordinary consumers, further contributing to the decline in IT sector revenues. These factors have led to the need to reduce costs in corporations, with the realization that there is no longer a need for all of the employees hired during the rapid growth of recent years.

Against the backdrop of the global threat of economic downturn and subsequent layoffs in the tech sector in Bulgaria, HR experts have not observed unusual layoffs. However, hiring in the technology sphere is visibly changing, with various studies showing that new jobs have decreased at double-digit rates in recent months. The data indicates that the hiring decline is mainly for lower-level positions requiring less work experience. It is also noted that more companies are looking to hire people on a project basis, without wanting to commit to permanent employment contracts, driven by the desire to limit their expenses.

According to Nikolay Nikolov from the Bulgarian Association for People Management and the Bulgarian Confederation of Employers, who is also a partner at “Horizons Bulgaria”, by spring it will be clear what the effect will be for the country – whether the labor market in the IT sector here will follow that in the USA and Western Europe or, on the contrary, Western companies will prefer to rely on even lower costs in Bulgaria. We cannot ignore the fact that salaries in Bulgaria are still below the levels in Western Europe and the USA, which could be interpreted as good news for the labor market here. Expectations are also positive from Nadezhda Vasileva, Managing Director of “Adecco Bulgaria”, as reported by Capital newsletter. According to her, there is always a delay in hiring at the beginning of the year, but with its lower costs, Bulgaria remains attractive and is more likely to attract foreign businesses than to lose them. Whatever the mid-term forecast for the development of the IT sector and hiring new employees in our country may be, one thing is certain – to continue our sustainable development in technology companies, we need to constantly invest in knowledge and quickly retrain to keep up with the dynamic changes in the technological world.