Computer Science and Technology companies aren’t hiring very much at all right now. What causes this and what metric can people use to quantify “badness” of the market? Low net profit?
In: Economics
People can’t afford to pay for a company’s products. The company loses revenue. The company goes bust. All those employed by the company become unemployed and look for other jobs. Except there are fewer jobs because companys are going bust, pushing more people to be competing for fewer positions. Companys that are still up and running are also finding that people can’t afford their products. They make less money. They can’t afford to hire new people. Then they can’t afford to keep their existing staff, so they make them redundant. Those newly unemployed people find there are fewer open vacancies etc etc
The issue at the root cause is cost and profit margin. If your business costs go up (energy, data, rent etc) due to a variety of causes – inflation, supply issues, price gouging etc – you pass those increased costs on to your customers by rasing prices. Then your customers can’t afford to buy your product anymore, and the above cycle begins.
Also, an added issue here is technological developments and AI mean that some companies are no longer relevant, so they go bust. And companies can also utilise AI/tech for much less than it costs them to employ actual people (see for example, Duolingo replacing their transalators with AI). Therefore they have a smaller staff, which means there are fewer open job vacancies.
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