Signs of recovery in London’s tech market

When looking at technology roles based in non-tech companies, London job volume was only marginally down in the past month (–1.52%) and saw a small uptick of +11.48% in May.

The new report from recruitment specialists Robert Walters and jobs market intelligence firm Vacancysoft, unveils that if job volume for tech-based roles continues at the pace it is this year then London would still be –54.2% down when compared to 2022.

Ben Litvinoff, Associate Director, Technology at Robert Walters, comments: “Whilst it is great to see job volume increase in the past few months, it would be amiss to not acknowledge that demand for technology professional sky-rocketed during and post-pandemic – so a lot the decline we are seeing in roles is more so a levelling-out process, where job vacancies now are on-par with what we saw pre-Covid (2019).

“The early signs of job flow returning is linked to considered and business-critical hires, the return of transformation and change projects which may have been put on hold at the start of this year, and investor activity slowly returning leading to a rise in demand for developers and infrastructure specialists.”

James Chaplin, CEO of Vacancysoft. comments: “While tech companies may have cut back on their recruitment this year, the industry is taking an ever increasingly important role in the London economy. With that we are forecasting the sector to rebound next year, as the economy normalises.”

Mid-year turnaround

Early March saw the collapse of Silicon Valley Bank – sending shockwaves through the global tech market, with investors around the world holding back to see what the fallout may be.

The following month saw tech giant Meta layoff 4,000 employees, with Google’s parent company Alphabet announcing 12,000 job losses at the start of this year, and Twitter’s new CEO Elon Musk stating that he had cut company headcount by 80% since taking over at the backend of 2022.

The impact was certainly felt in London, with tech job roles within tech companies plummeting by –50.4% in April (vs the previous month), and in non-tech firms by –37%, according to the Robert Walters report.

Ben adds: “Much like in any industry the largest players can have a notable impact on business and investor confidence – and technology was no difference.

“What many didn’t take into account is the significant hiring spree many of these large firms had gone on for three years, and so when cost-cutting became a necessary evil for almost all companies amidst a global recission, headcount was surely going to be looked at.”

Skillsets in demand

Job creation for software developers and engineers has returned to pre-pandemic levels – which now accounts for 28% of all London-tech roles that are currently advertised.

Tech Management and Infrastructure roles has also increased in prominence – accounting for 23% and 14% of all roles advertised for, respectively, a +2% increase on the past few years.

Sectors that continue to hire

The only two sectors that have surpassed the volume of tech roles that have hired for this year compared to 2022 is Not-For-Profits (+72%) and Industrials & Engineering (+17%).

Ben adds: “With not-for-profit and public sector it is not surprising to see the bulk of their tech hiring now. Whilst the private sector was able to respond to change much quicker in the past few years, we are only just seeing public sector firms secure this level of budget now – and so we anticipate hiring to continue in this area.”

London’s banking & financial services sector continues to invest back into its tech function – with 28.8% of all new London roles coming from this market.

In fact, this year alone, the volume of new tech roles across UK banks NatWest Markets and Lloyds has increased by +72.5% and +48.4% respectively.

Ben continues: “The financial industry continues to undertake significant digital transformation to meet the evolving needs and expectations of customers.

“Take the partnership between Deutsche Bank and Google Cloud to co-innovate the next generation of cloud-based financial services, and the London Stock Exchange Group and Microsoft 10-year strategic partnership for next-gen data & analytics – and you’ve got a really exciting space where hiring will be paramount to the delivery of such projects, and so far there is no strong evidence that these roles are being completely taken away from the capital.”