Despite Big Tech Layoffs UK Tech Industry Confidence Soars

The UK tech industry sees increased business confidence, despite worrying economic outlooks and previous mass tech layoffs.

According to research commissioned by Integro Accounting, UK tech businesses are growing in confidence about their economic prospects. The research found rising confidence amid rising interest rates, high inflation, and ongoing layoffs made by big tech companies.

There were more than 400 businesses surveyed across a range of subjects from staffing shortages to sales volumes. IT consultancy organisations are reporting a clear improvement across most metrics, in stark opposition to businesses in other industries like hospitality, hospitality, and construction that aren’t as positive in their forecasts.

Graph 1: How do you expect your company’s overall performance to change over the next 12 months?

 “The UK’s tech sector is rebounding strongly at a time many other sectors of the economy are struggling,” commented Christian Hickmott, Managing Director of Integro Accounting. He continues,  “There are signs that business failures among tech businesses are starting to fall from their peak at the end of 2022, whereas the upward trend is continuing for many other sectors of the economy.”

“Rising interest rates are exacerbating the financial strain many businesses are facing as they struggle to service loans. Tech businesses usually carry lower levels of debt than capital intensive industries, which means they are relatively insulated from rate rises. This puts them in a much more resilient position as interest rates continue to rise from record lows.”

Graph 2: Is your business currently experiencing a shortage of workers?

Furthermore, Integro Accounting also finds that talent shortages are continuing to lessen in the UK IT industry. Around 77% of business leaders state they’re no longer experiencing a shortage of workers. This percentage is up from 69% in Q1 and 66% in Q4 of last year.

When it comes to IT consultancies that are experiencing talent shortages, 41% of them said they’ve been unable to full meet demand due to this. This is quite a marked improvement from 54% of consultancies saying the same in Q1 of this year.

Christian Hickmott says: “The UK has been relatively shielded from the mass layoffs from the US tech giants, which has affected both contractors and employees. While there have been layoffs and hiring freezes, these have benefited other users of tech skills who have often been priced out of the market in the war for talent with big tech.”

“Hirers are now generally finding they have a larger candidate pool to choose from, whereas previously they might have had only a couple of viable applicants for a role.”

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