Recent tech company layoffs have created opportunities for other industries to hire much-needed tech talent, according to CBRE’s recently released Scoring Tech Talent 2023 report.
Overall tech talent employment grew by 11% between 2020 and 2022, with tech companies adding nearly 2.5 times more tech workers than the next highest industry sector, professional services. Software developers and programmers across all industries accounted for 60% of the new tech talent employment. But, as the economy slowed in the second half of 2022, tech companies began laying off employees, many of whom were in non-tech roles like sales and marketing.
Since 2022, the tech industry, which employs 41% of all U.S. tech talent, has accounted for 30% of the 700,000 workforce layoffs globally by U.S.-based employers, according to Challenger, Gray & Christmas. Of this total, approximately 25% were tech talent; the remaining 75% were in non-tech roles, according to CBRE’s analysis of data from layoffs.fyi. Tech talent employed by non-tech employers, which represent 59% of U.S. tech talent, did not announce major layoffs.
In addition to these layoffs, tech job postings declined from a peak of 900,000 in mid-2022 to 450,000 by early 2023, based on CBRE’s analysis of Lightcast data.
Remote working trends have allowed tech talent employers to diversify their workforce both geographically and demographically. Job postings for remote tech talent grew to 20% of the 593,000 total tech job postings in May 2023, on par with the share of remote postings in mid-2022.
Working from home more than in the office remains the tech industry standard. In 2021, 46% of tech talent across all industries and 44% of tech industry workers across all occupations worked from home. The number of people working from home since 2021 has declined and likely will continue to do so as employers require more in-office work. Building security company Kastle Systems’ 10-city “back-to-work barometer” of office occupancy levels increased by 12 percentage points between 2021 and 2022.
Tech talent remains in high demand despite economic uncertainty and employment reductions. Remote and hybrid work will benefit tech talent employers and challenge some office markets with reduced demand, which is why our annual cost analysis cut the amount of office space needed per employee.
Phoenix’s Tech Talent Status
- Phoenix ranks No. 15 overall in CBRE’s 2023 Scoring Tech Talent report, moving up one spot as macroeconomic headwinds slowed tech talent hiring by major tech firms in North America.
- Phoenix’s tech talent workforce (109,160) increased 30% in the years 2017–2022.
- Phoenix saw a 44% increase in tech degree completions between 2017 and 2021. The number of tech-related degrees grew in North America by 60,000 during the same time period.
- Phoenix created more tech graduates (28,053 from 2017 to 2021) than tech jobs (17,580 from 2018 to 2022), meaning the market creates a surplus of tech talent for expanding and relocating companies.
- Phoenix’s population of people in their 30s with a college degree increased by 32.4% from 2016 to 2021, the third-ranked U.S. market with the biggest gain among large markets in that span. And it is the fifth-ranked U.S. market with the highest concentration of people in their 20s with a college degree, at 27.8% of its population.
- Phoenix has relatively affordable real estate costs for a leading tech hub. Both its average annual office asking rent ($30.05 per square foot) and average monthly apartment rent ($1,636) are the 21st most expensive, and its ratio of tech salary to apartment rent of 20.2% is the 18th highest.
For more than 20 years, Colin Yasukochi has specialized in strategic research and advisory services for commercial real estate, providing insight that reveals opportunities and guides decision making. He currently serves as CBRE’s executive director of its Tech Insights Center, based in San Francisco, which provides thoughtful real estate perspectives on the ever-evolving tech sector in the United States.
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