Software companies like Fastly and Norton Lifelock are feeling the brunt of the tech industry's downturn with plunging stock prices and similarly declining software job openings.
Snap in early September laid off around 20% of its employees — more than it had anticipated, following a hiring slowdown in May. Other major tech companies like Google and Microsoft have similarly been making cuts or implementing hiring freezes ahead of recession chatter.
"Management teams believe the IT spending environment remains cloudy as they continue to protect margins," Analyst Matthew Hedberg of RBC Capital Markets said in a report that shows 23 consecutive weeks of software job posting declines.
The end of August was even bleaker than the end of July for both year-over-year and year-to-date comparisons. There were 10% fewer software job openings in July compared to the same time last year, while year-over-year postings for August were down nearly 25%. And compared to the beginning of the year, July had 23% fewer postings, while August had nearly 32% fewer postings.
"Job postings will likely continue to decline until there is a better sense of improving end-market demand and we will watch [week-over-week] trends for a change in the downward pattern," the report read.
But the landscape isn't all dire — companies like Xometry, Clearwater Analytics Holdings, DoubleVerify Holdings Inc. and Pubmatic in July were among the top companies posting more jobs than they were earlier this year.
Adtech was particularly resilient in the unstable environment and was the only group of software companies that experienced growth since the beginning of the year, while infrastructure and monitoring software companies experienced the largest downturn.
Analysts were also surprised that private companies "declined significantly less" than public companies did.
Software job openings did not drop as severely as they did at the beginning of the COVID-19 pandemic, but analysts predict unlike pandemic numbers — which rebounded quickly — the current slump will last much longer.
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