Is the tech recession over? Maybe.
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After peaking early this year, the number of tech industry layoffs—and the number of companies cutting those jobs—appears to have slowed in recent months.
So does this mean the tech slowdown is over, both in Indiana and more broadly? That’s not so easy to say.
Local tech executives see reasons to believe Indiana’s tech economy has passed the worst of the slump that began in the spring of 2022. But local job-seekers are not so optimistic.
“Just from the people that I talk to, and the organizations that I know, to me it doesn’t seem like it,” said Lindsay McGuire of Fishers.
McGuire lost her marketing job at Fishers-based Formstack in May when that company laid off about 40% of its workforce. She was able to land another job a few weeks later, as remote associate director of content and campaigns for Boston-based marketing platform Goldcast.
McGuire said she was able to find another job so quickly—and a higher-paying job, at that—because she has a strong professional network and had already begun looking for a new job before the Formstack layoffs hit.
“I am probably one of the lucky very few that my opportunity after I got laid off was much, much better than the opportunity I was at before. I’ve gotten a much better title; I have much better pay. But I know a lot of others are not in the same situation,” McGuire said.
During the height of the tech boom in late 2021, software developers were in extremely high demand. But when Troy Weigand of Brownsburg found himself looking for a job earlier this year, he experienced a job market that seemed tilted in employers’ favor.
Weigand started looking for work after he was furloughed from Kinney Group, a Carmel-based tech services firm. Even though he said he was being “somewhat selective” in the jobs he chose to apply to, Weigand still found more than 100 available jobs. But all those applications generated only a handful of actual interviews.
After about a month, Weigand landed a developer job at Indianapolis-based marketing tech firm Emarsys. He started the new job in August. “I’ve really been enjoying my time there so far.”
Emarsys has about 1,000 employees worldwide, including just over 100 in the Indianapolis area. The company’s corporate parent is Germany-based software firm SAP SE, which acquired Emarsys in late 2020.
Starting about a year ago, SAP went through a restructuring that resulted in the loss of about 3,000 jobs, or 2.5% of the company’s total workforce. But that process is complete in the North American market, and Emarsys has hired nearly 20 people so far this year, with four others starting soon, said Emarsys’ Indianapolis-based global head of product marketing, Kelsey Jones.
Because SAP kept a close eye on its spending during the pandemic, Jones said, the company didn’t have to reduce its headcount as drastically as some tech firms have. “We’ve been really fortunate.”
Not everyone has been so lucky in their job search.
Andi Robinson, who lives in Johnson County, lost her marketing job at Corteva Agriscience following a corporate restructuring in November. Last month, she decided to focus on freelancing after an eight-month job search proved unsuccessful.
“During that time frame, I applied for more than 100 jobs,” Robinson said. “There just hasn’t been, particularly in the tech industry, a lot of high-level jobs out there.”
Robinson, who turns 52 this month, said job-hunting was especially discouraging late last year and early this year when several large tech companies announced layoffs. In January alone, for instance, Google announced 12,000 layoffs, Salesforce announced it would cut 8,000 jobs, and Microsoft announced 10,000 layoffs. Between two announcements in November of last year and in March of this year, Facebook parent Meta announced a combined 21,000 layoffs.
Though these employers are all based outside Indiana, Robinson said the age of remote work made those large-scale layoffs seem connected to her own situation. “You just kind of sigh a little bit … that’s more people flooding the job market.”
Blake Koriath, chief financial officer at Indianapolis venture studio High Alpha, said he’s optimistic that the large-scale job cuts are in the rearview mirror.
“I’m seeing some stabilization in tech and startup companies right now,” Koriath said. “I’m optimistic that things will begin to improve over the next 12 months.”
Many of the layoffs happened because tech companies overhired during the tech boom peak in late 2021, Koriath said. Once the slowdown hit—and investment funding became harder to secure—companies shifted their focus from growth to efficiency, shedding workers in the process.
Those workforce challenges have also affected some of High Alpha’s portfolio companies. Indianapolis-based Zylo, for instance, reduced its staff 10% in August. Marketing-tech startup Demandwell had both layoffs and hiring freezes from January 2022 to June of this year, co-founder and CEO Mitch Causey told IBJ in June.
Ting Gootee, CEO at Indianapolis-based TechPoint, said she also thinks the worst of the slowdown is past and the business cycle will improve from here. “Hopefully, we’re at the bottom now.”
But, Gootee said, there are still some areas of concern in the tech economy. “There is still a level of market anxiety.”
Software vendors are reporting that it takes about 40% longer to close sales than it did when the market was at its peak, Gootee said, meaning that if a software firm had previously been able to close a deal in 10 months, that same deal might now take 14 months.
Software sales cycles are especially relevant to Indiana because a significant number of local companies, including all of High Alpha’s portfolio companies, are business-to-business software firms.