Hiring on hold: From ghost jobs to fake LinkedIn profiles, the high-tech employment crisis is worsening
If in 2021 the market belonged to the employees, who essentially were the ones interviewing the companies, and in 2022 the situation was unclear, then in 2023 it is a market that completely belongs to employers who carefully choose the employee they will hire
The year 2022 has passed and the uncertainty that surrounded it has been replaced by one particular certainty: job insecurity is on the rise in the local high-tech industry. The industry which not that long ago turned young military veterans into sought-after talents is now on the defensive.
In 2022, high-tech in Israel suffered layoffs of over 6,000 workers, and in the United States more than 100,000 workers were laid off. It is clear to all parties that this was only the prelude to 2023 and it is possible that the trend will even slide into 2024. The possibility of a recession is taking its toll on the global economy. The direct result of a recession is companies that reduce purchases, reduce contracts and postpone any activity that is not in their business core. For the startup companies in particular and the local technology companies in general, this is difficult news that will lead to a change in the annual forecast and mainly to a reduction in their workforce.
The dark predictions for 2023 have come true over recent weeks. In Israel, hundreds of workers have been laid off in the month of January so far, while the four big tech giants: Microsoft, Google, Amazon and Meta, collectively laid off 46,000 workers around the world within a few days. The layoffs at the giants early in the year are a clear sign that the companies understand that matters will certainly not be rosy in the foreseeable future. The four leading companies are not alone, Salesforce has also laid off thousands of employees, Intel will significantly reduce its workforce in the coming years, and so will virtually all the American giants.
In Israel, according to the data of the employment service, the upward trend in the number of job seekers in the high-tech industries continues. The number of software developers and application analysts jumped 19% from 2,600 in October 2022 to 3,100 in December. The number of job seekers who are information and technology engineers or technicians increased by 18% from 930 to 1,090.
In recent years, the biggest threat to the local startup companies has been the big American tech companies: Amazon, Google, Microsoft, Apple, Intel, and also Salesforce and other chip giants such as Nvidia and others. These companies offered huge salaries and working conditions that were very difficult for the Israeli companies to compete with. Therefore, many of them had to either increase the salary or give up on good employees. In 2023, the giants will be busy with cutbacks, layoffs and deep contemplation of the state of the manpower they employ, meaning the threat to the local companies is significantly lower.
"The layoffs of tens of thousands of people from big tech companies such as Google, Microsoft, Meta (Facebook), Amazon and Salesforce, illustrate the understanding that there will be no recovery in the market soon, since these are companies that plan long-term moves," said Shiri Vax, CEO of the recruitment company Gotfriends. "The number of job seekers in the market continues to grow, mainly due to rounds of layoffs by big tech companies. This leads to increased competition for jobs, making it difficult for recent graduates and less experienced employees to find work."
Despite the layoffs in the high-tech industry, most companies have not decreased wages. An entrepreneur at one high-tech company told Calcalist that despite the growing wave of layoffs in the industry, there is no decrease in workers' wages. "Employees who are in demand receive the wages they ask for and there is no decrease in wages. What we are seeing is many more high-level workers who are looking for work which were previously not available in the market."
Vax adds in this context that "in the last few months, layoffs in high-tech range from 5% to 20% of the workforce and almost every company has cut staff. There are few companies that have to make this cut, but there are many companies that are taking advantage of the situation to become more efficient or are dragged along due to the herd effect. As a placement company we feel that when it comes to recruiting talent, the market is still a market of employees and not of employers. There is still a fight for every talent and returning candidates who receive market-breaking salaries."
One of the main reasons for the increase in the number of job seekers in the industry is the significant decrease in the pace of employee recruitment. If in 2021 the market belonged to the employees who essentially were the ones interviewing the companies, and in 2022 the situation was unclear, then in 2023 it is a market that completely belongs to employers who carefully choose the employee they will hire. Each position is considered and each position receives much greater attention. HR managers suddenly have quite a supply of worthy candidates.
"It is important to note that in this period there is also an opportunity. We are interviewing rare talents that were impossible to meet six months ago and smart companies that knew how to take advantage of the opportunities today will benefit from them tomorrow," says Vax. "The ones who benefit from the situation are the new startups that are built during this period and can get innovative and leading employees."
Although layoffs in high-tech are not rare, many companies try to hide the decrease in the number of their employees or at least obscure the damage to the company. Some companies do this by advertising ghost jobs on the site, meaning jobs that are actually not available. "There are a lot of ghost jobs from companies that stopped recruiting and continue to advertise to show business as usual," says Vax. "Ghost jobs mainly serve companies that know that without such jobs, they convey distress and future insecurity to future customers and that many jobs on the site indicate an active company."
Among other things, many companies try to hide the decrease in the number of employees by using fake profiles on LinkedIn - one of the main tools for searching for employees - or by using employees who are no longer with the company but did not rush to update their profile.