Tech lay-off wave continues to bite at Vietnam’s heels
Entering 2023, Microsoft and Google announced global lay-offs of 10,000 and 12,000 employees, respectively. IBM laid off nearly 4,000 members, while Spotify cut about 6 per cent of staff. Since November last year, Meta, Amazon, and HP have also adjusted thousands of positions.
In Southeast Asia, Shopee parent company Sea Group, Crypto.com, e-commerce platform JD.ID, and GoTo – a merger between ride-hailer Gojek and e-commerce platform Tokopedia – are among the companies that experienced a drastic staff cut in the past year. GoTo in November 2022 cut 1,300 jobs, equivalent to 12 per cent of the number of employees, while Sea Group let go of 7,000 employees in the past six months. Both companies cited a common cause being challenging macroeconomic conditions.
Industry insiders in Vietnam are generally wary of the effect this laid-off wave might have on the domestic market. Nguyen Khuong Tuan, CEO of Stech Company, assessed that the massive lay-off stemmed from the world’s economic crisis and will certainly affect Vietnam.
“In some markets like the US, unicorn startups receive too much favour from investors. Accordingly, businesses have quickly recruited numerous human resources (HR), pushing up operating costs. Therefore, when the bubble burst, the common ground for companies was also pulled down,” Tuan assessed. “In Vietnam, companies that provide technology as a service will be the hardest hit.”
However, Tuan said that job opportunities in the industry are still very promising, as the demand for HR is still there. In particular, software outsourcing companies in Vietnam are still short of high-quality personnel.
Likewise, Ly Ngoc Tran, HR outsourcing director of Talentnet Corporation, believed that the domestic tech job landscape is not too gloomy.
“The massive lay-offs, while devastating, are understandable after nearly a decade of booming growth and then the pandemic,” Tran said. “In Vietnam, the HR market will temporarily cool down at least in the first six months, in order to minimise the risk of market changes.”
As for Vietnamese tech companies, Tran assessed that restructuring internal talents to optimise cost and maximise existing resources would pose a challenge, as businesses have to determine which positions are permanent and which can be shifted to part-time or project-based types.
“Agile business transformation model will take the throne, and HR outsourcing trends will rise as an optimal solution in this turbulent time,” Tran noted.
Nguyen Huu Le, chairman of TMA Solutions, shared a more optimistic view of the impact on tech personnel in Vietnam as the outcome of the world’s lay-off trend, as these global giants look for lower-cost HR.
“With recruiting personnel in Vietnam to work remotely, tech groups worldwide will be able to save significantly, as the average cost is only one-sixth to one-eighth compared to Silicon Valley. So tech professionals in Vietnam are not worried about these recent incidents,” Le said. “However, domestic IT companies would then have to compete for recruitment with big corporations.”
While tech professionals in Vietnam are expected to still be heavily recruited, experts agreed that there is currently a shortage of highly trained and well-oriented HR for the domestic industry. “The door of opportunities will still be open for Vietnamese tech personnel for at least another 10-20 years. The problem is that students in this major need to be well-equipped with the right knowledge to grasp these opportunities upon graduation,” Le added.
Meanwhile, Tran of Talentnet emphasised that for vertical development, tech talents now need updated technical skills in AI and machine learning, while for more comprehensive roles, more soft skills are required, such as business acumen, and project management.
“To compete and adapt in the current situation, tech staff should upgrade themselves to be a business partner who not only excel in their job description but also contribute strategic views to the overall business development,” Tran said.