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Announcements of recent layoffs by several tech firms indicate the unusual economic times we find ourselves in. The US economy added 528,000 jobs in July, blowing past estimates, but many economists say that number does not tell their entire story. Job growth did slow in August with the unemployment rate rising to 3.7%.

So what is happening with layoffs ?

Late last month, Snap Inc., the parent company of Snapchat, announced it was laying off some 20% of its workforce — more than 1,200 employees, CNN reported.

The interesting phenomenon is that while layoffs are bad news all around, demand for IT talent remains strong. Take H-1B visas.

One indicator of the strong demand came on Aug. 23, when US Citizenship and Immigration Services announced it had received enough petitions to reach the congressionally mandated 65,000 H-1B regular visa cap and the 20,000 H-1B US advanced degree exemption, also known as the master’s cap, for federal fiscal year 2023.

According to uscis.gov, H-1B is a nonimmigrant classification that allows people who are not US citizens to work in the States in positions that require a degree of high-level specialty knowledge. Previously, the USCIS had announced it received 483,927 H-1B registrations in March for federal fiscal year 2023, up from 308,613 in fiscal year 2022.

“It really reflects the extraordinarily level of demand for talent,” said Mark Roberts, CEO of the TechServe Alliance. He noted the number of registrations is up 57% year over year.

One note on the process: The initial electronic registration selection process was completed in March, and the USCIS conducted a random lottery to select the 127,600 registrations it estimated would be needed to meet the visa cap. The Society for Human Resource Management reported the USCIS selects more petitions than needed to fill the cap to account for employers who don’t follow through on the petition process as well as cases that are denied or withdrawn.

PREMIUM CONTENT: US Staffing Industry Forecast: September 2022 Update

H-1Bs aside, other indicators also point to strong demand for tech talent.

“Many IT consultants that work through IT staffing companies are still receiving multiple offers,” Roberts said. “Despite a few stories of layoffs and hiring freezes among some high-profile tech companies, overall demand for technical talent still significantly outstrips supply. So even if there is some slackening of demand in a particular industry, there are other sectors that will gladly absorb those IT professionals.”

The unemployment rate in IT (as of end of Q2) was approximately 2%. And the TechServe Alliance’s IT index shows overall IT employment has remained flat for the past year because of a lack of supply.

Our research at SIA shows growth in IT staffing has recently been particularly strong. There is talk of possible moderation in that growth, but those forecasts still see the market as strong.

Where do you see the IT market heading? Send me an email with your thoughts at cjohnson (at) staffingindustry (dot) com.

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