The global downturn will force companies to look for more affordable skilled programmers which are on high demand for globally.
Avi Z Liran
Ned Davis Research, known for its Global Recession Probability Model, estimates that there is a 98.1 percent likelihood of a global recession next year, the highest since the global financial crisis of 2008-2009. Nouriel Roubini, known as “Dr. Doom”, the economist who predicted the 2008 financial meltdown suggests that we brace for a ‘long and ugly’ upcoming recession.
There are many reasons for the downturn and great risks for the future. To name a few: The global rise of inflation, the war in Ukraine and its implications on the price of commodities and energy, a threat of using nonconventional weapons, global warming with intensifying disasters such as drought, floods, and earthquakes, high-interest rates, the Covid zero-tolerance policy in China, continuous chaos in supply chains, and declining growth rates.
A survey conducted by PwC suggests that about 50 percent of firms in the US expect to reduce their labor forces in the next six to 12 months despite concerns about their ability to hire and retain the right talent. What we begin to see is that companies like Goldman Sachs (GS) and many more are starting to streamline their workforce. Last month GS has begun laying off mid-level investment bankers amid a downturn in dealmaking as the economy slows and has plans to trim more. Another financial institution Credit Suisse weighs up 5,000 job cuts as part of a restructuring plan and many brick-and-mortar companies are following the trend.
Tech giants like Microsoft and Google are among those who hit the breaks on new hiring while other well-established tech giants Tesla, Tik-Tok and Netflix, and many more are opting to lower their costs by cutting their headcount. A leading indicator of the grim forecast is when companies start to trim their recruiting departments, like Twitter which laid off 30 percent of its talent acquisition team just two months into a companywide hiring freeze.
Maher Saba, Meta’s head of engineering said earlier this month, “If a direct report is coasting or is a low performer, they are not who we need; they are failing this company.” Other companies such as Spotify announced that you scale back their hiring goals by 25-35 percent.
The chart of layoff aggregation from TrueUp paints a worrying trend. Although it peaked in June 2022, the signs are that it will intensify again in the coming few months. Meanwhile, in Asia, hundreds of workers from start-ups have been fired in South East Asia in the last few months. Share prices of tech companies such as Grab shrank. Investors are no longer happy with growth and market share. They want to see profits. Online shopping platforms Malaysian-based iPrice and Indonesian education tech company Zenius let go of hundreds of employees each. Singapore-based Shopee is set to make massive layouts soon.
Can this downturn be an opportunity for Nepal?
I met Karvika Thapa, CEO of Kimbu Tech in August 2022 during the annual Sales conference of Growth Sellers in Nepal where we both participated as speakers. She inspired the audience with her work and vision for the future of tech workers serving the world from Nepal, exporting IT services and products to the world instead of people who will need to leave their families to get better pay elsewhere.
During our delightful conversation after our presentations, I learnt that Karvika left the American dream and relocated back home to Kathmandu with her husband and two young daughters after 14 years of a promising IT career in America working for prominent companies such as Boston Scientific, Merkle and State University
Karvika spoke with passion and conviction about her the company she founded which is one of the few women-led IT startups in Nepal. Kimbu Tech provides services including software development, BPO and maintenance for companies in Israel, the US and is expanding elsewhere.
The global downturn will force companies to look for more affordable skilled programmers which are on high demand for globally. The salaries in Nepal are much more competitive than most of Asia.
Nepal has the prospects of creating higher paying skilled jobs and possibly reduce the physical export of skilled Nepalese workers to other countries. Instead of leaving home the families for an overseas job, what if people will upskill and can work from Nepal while staying with their families? In an effort, she also expanded in tech education by investing in V.S. International College, a Tech College in the hopes to produce more international level tech resources right here in Nepal. She also provides scholarships to girls who want to pursue in Tech careers which she says will have profound return for the country.
Karvika told me, “To benefit from the global slowdown, Nepal has to close the skills shortage gap, increase the level of the workforce and include more women in tech…. The next five years can be a tech boom for Nepal but only if we invest in it.”
Liran is an organizational culture consultant, coach, author, humorist and TEDx/IDEASx speaker.
