The COVID-19 pandemic offered individuals and businesses an opportunity to rethink every aspect of life—and it had a big impact on the job market, too. Many industries, including technology, experienced significant changes in the employment landscape.
Remote work became a necessity thanks to the pandemic—and the immediate need for hardware and software caused an unexpected boom. Demand soared for docking stations, virtual collaboration software, and monitors. Cue the overreaction—Big Tech hired for what they thought would meet the increased demand and future growth. Fast forward to 2023 — many workers returned to the office, at least part-time, slowing tech sales. The result? Big Tech layoffs in the headlines—despite a positive outlook. Let’s see how this unfolded.
While worldwide PC shipments declined over 16% in 2022, the big picture reveals a bright future. Manufacturers shipped over 286 million units in 2022, up 9.5% over the 261 million shipments in 2019. In fact, the industry has seen significant growth, sending many tech company stocks soaring. Despite the growth, many technology companies experienced layoffs to course correct for pandemic over-hiring.
Many industries, including tech, see marketing employees’ salaries, branding, and campaign execution expenses as costs, not profit drivers—making them vulnerable to elimination in economically uncertain times. Brands tempted to cut back on marketing spending to save money in the short-term must understand how pivotal brand building is to their long-term success.
Numerous studies show it’s smart to continue investing in marketing. A 2009 Harvard Business Review study suggests brands who focus attention on consumer needs through marketing are more likely to survive challenging economic times. Similarly, Nielsen estimates brands who reduce media spend during tough times can expect to lose 2% of long-term revenue per quarter. The bottom line? Investing in development of authentic branding creates enduring value—especially important in the tech industry.
Beyond maintaining marketing budgets to meet consumer needs, other steps to ensure tech company’s long-term success include retaining their top employees. How? By providing the training and support they need to succeed, offering flexible work culture, and competitive compensation packages.
Another pro tip—developing new products and services that meet the changing needs of customers is key for companies to remain competitive. During uncertain economic times and after, customers purchasing behaviors shift in fundamental and sometimes permanent ways. The companies that understand and pivot will have pole position in the race for long-term profitability.
In conclusion, the COVID-19 pandemic significantly impacted the technology industry. Many companies over-hired during the pandemic to meet near-term demand, and their inaccurate forecasts led to a surplus in staffing resulting in unfortunate mass layoffs.
Despite this, the industry is thriving above pre-pandemic levels—a promising indicator of future growth and success. And smart tech companies will continue to invest in marketing to adapt to consumer needs and buying patterns. For more insights, subscribe to the Cargo newsletter or follow us on social. We’re the authority on helping technology brands market and sell to their Small and Medium-sized business customers—no matter what the economy brings.
Sources:
- https://www.gartner.com/en/newsroom/press-releases/2020-01-13-gartner-says-worldwide-pc-shipments-grew-2-point-3-percent-in-4q19-and-point-6-percent-for-the-year#:~:text=For%20the%20year%2C%202019%20PC,senior%20principal%20analyst%20at%20Gartner.
- https://www.gartner.com/en/newsroom/press-releases/2023-01-11-gartner-says-worldwide-pc-shipments-declined-28-percent-in-fourth-quarter-of-2022-and-16-percent-for-the-year#:~:text=Worldwide%20PC%20shipments%20totaled%2065.3,market%20in%20the%20mid%2D1990s.
- https://hbr.org/2009/04/how-to-market-in-a-downturn-2
- https://www.nielsen.com/insights/2022/marketing-during-a-recession-finding-the-upside-of-an-economic-downturn/