Next two years will be ‘most challenging’


Microsoft CEO Satya Nadella says turmoil within the tech sector will continue through 2025.

Important reasons: Conditions that helped accelerate industry investment, such as more time at home and government stimulus, are gone, and tech companies are becoming more financially conservative.

Catch up soon: “The next two years will probably be the hardest,” Nadella told CNBCTV18 in an interview posted Wednesday.

  • There was an “acceleration” in demand during the pandemic, but it has now normalized to some extent, he added.
  • “Additionally, much of the world is experiencing an actual recession, and the combination of progress and recession means adjustments will be necessary.”

Big picture: More than 1,000 tech companies laid off more than 150,000 people last year, according to Layoffs.fyi.

What to watch: Driven by what he says will define the next wave of computing, AI, Nadella, whose company recently laid off jobs, said he believes “another massive growth cycle is possible in the tech industry.” I am optimistic.

  • He also cautioned against extrapolating short-term woes within the tech industry to the broader job market for tech workers.

  • “Tech jobs are not tech jobs,” he said. “I think that’s the key difference that we need to understand better.”
  • “Overall tech jobs are really on the rise,” he added, citing increases in tech jobs in financial services, energy and retail.
  • “Over the long term, all employees in all these industries will consume more technical infrastructure… Outside of the tech industry, more technical talent is being hired. I think that’s what we expect.”

Deeper


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