The world continues to witness mass lay-offs in tech
Lay-offs in tech globally- a quick recap
Tech giants worldwide, including Google, Meta , Amazon, and Microsoft, have all resorted to mass layoffs recently. Meta alone has conducted two rounds of mass layoffs in the past six months, with another wave set to hit 10,000 more employees in May. Even startups have yet to be spared, with companies across all sectors, from crypto to enterprise SaaS, announcing significant cuts. Around 135,000 workers in U.S.-based tech companies (or companies with a large U.S. workforce) have been laid off in mass job cuts so far in 2023, according to Crunchbase News. CNBC reports that this figure represents a staggering 38.5% increase from the same year-ago period.
SEA is no exception
The SEA region, too, has witnessed a surge in layoffs as companies struggle to stay afloat. GoTo, Sea Group, Shopee, and Glints are among the companies in the region that have had to proceed with mass layoffs due to financial constraints.
GoTo announced in November 2022 that it would lay off 1,300 workers, representing a significant 12% of its workforce. Sea Group has also had to bear the brunt of the economic downturn, with over 7,000 employees laid off over the past six months.
Vietnam overall hiring landscape in Q1 2023
Mass layoffs limited to industrial and manufacturing sectors
The impact of the global economic slowdown has hit Vietnamese workers hard, with mass layoffs in industrial and manufacturing sectors. As the crisis deepened toward the end of 2022, workers faced an increasingly uncertain future. According to the Vietnamese General Confederation of Labour (VGCL), from September 2022 to the end of January 2023, a staggering 546,835 workers from 1,300 enterprises were affected by these mass layoffs.
The wood-processing industry was hit the hardest, with 70% of its workforce facing the axe or having their working hours reduced. The manufacturing industry came a close second, with 50% of its workforce affected by the economic downturn. The footwear industry was also impacted, with around 25% of workers being laid off or facing reduced working hours, while the textiles sector witnessed layoffs of about 20%.
The situation was particularly dire for businesses specialising in leather shoe export. As per reports, these companies were hit by rising costs, declining orders, and stiff competition from other countries. This led to widespread layoffs, leaving thousands of workers in limbo. Ty Hung Company Ltd in Ho Chi Minh City, a well-known company specializing in leather shoe export, announced the termination of labour contracts for 1,200 workers. Similarly, the Vietnam Sanho Company Ltd, also in the leather shoe export category, plans to terminate the contracts of around 1,500 employees at their factory in Cu Chi District in Ho Chi Minh City due to a lack of orders.
Tech hiring remains tight
Despite massive layoffs in industrial and manufacturing sectors, the tech industry in Vietnam has bucked the trend. There is anecdotal evidence of layoffs among tech companies in Vietnam, as reported by Stech CEO – Mr. Nguyen Khuong Tuan, showing that tech companies in Vietnam have not entirely evaded layoffs. Also, Vietnamese tech talents in the US are returning to home by the flood of global layoffs.
But the bigger picture paints the opposite.
Vietnam’s overall job market has remained stable in the first quarter, with 1.1 million jobs added to a total of 51.1 million, shrugging off mounting worries of a global slowdown. Vietnam’s General Statistics Office has also reported a year-on-year rise of 2.2 percent in job growth and a decrease in unemployment to 2.25%.
The tech and ICT sector in particular are still on the rise and the hiring market for tech talents remains tight. In the current tech hiring landscape of Vietnam, an overwhelming 81.5% of tech companies are looking to increase their talent pool, as revealed by a recent survey conducted by ITviec. MobiFone, a leading Vietnamese mobile network operator, has also announced its plans to recruit an additional 300 IT professionals in the fourth quarter, bringing its workforce to 4,000 employees. Despite the challenging market conditions and parent group’s cost-cutting efforts, prominent e-commerce platform, Cho Tot, a subsidiary of Carousell Group in Vietnam, has expressed no intention of reducing its workforce.
Vietnam is rapidly emerging as a technology powerhouse, driven by a surge in digital transformation and technology adoption. Fintech, Web3, NFT, and Crypto are the buzzwords of the moment, along with companies across sectors ramping up their digital efforts to stay competitive. Fueling this revolution is Vietnam’s significant investment in technical resources and digital transformation acceleration policies, with the ambition of launching and expanding 5G. Furthermore, Vietnam is set to be one of the first countries in the world to deploy the National Digital Transformation program, a visionary initiative aimed at providing 80% of level-4 online public services via multiple channels, including smartphones, enabling seamless online fee payments.
Vietnam’s technology sector is poised for continued growth and lucrative job opportunities, as it remains a hotbed for high-paying tech-related jobs. Top talent in Vietnam is drawn to this field, lured by the competitive salaries and attractive benefits packages on offer.
With more than 67,198 tech firms generating an estimated $5.9 billion in profits in 2022, Vietnam’s digital technology industry has witnessed significant growth in recent years. The demand for IT recruitment remains strong, and with substantial investments pouring in, tech startups are expected to thrive and continue to drive the country’s economy forward.
Bottom line
Vietnam’s growing future in the tech industry, along with the vast pool of talented professionals, has become an attractive destination for international tech firms of all sizes. Inspius, with our HR-centric approach, offers an ideal solution for Singapore and U.S. companies looking to not only build their software engineering team in Vietnam but also manage tech talents proficiently.
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