The Straits Times says

Long-term future of tech still positive

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In a reversal from the fevered pace of hiring seen these past few years, many tech companies have been slashing jobs as ambition has failed to meet reality, and costs have risen out of control. Tech darlings around the world have announced layoffs in recent months. Facebook parent Meta has slashed 11,000 jobs worldwide. Twitter and e-commerce platform Shopee have also laid off employees. Twitter attributed its woes to a weak macroeconomic environment and online advertising market. In the region, Indonesian behemoth GoTo recently announced a 12 per cent reduction of its workforce to curb costs. In Singapore, tech firms reported 1,270 layoffs of resident workers from July to mid-November, almost five times the 260 resident workers – comprising Singaporeans and permanent residents – that were laid off in the first half of 2022.

Unfortunately, this is unlikely to be the end of the story as the full extent of the tech slowdown has yet to play out. Job hunting will also be tougher given the challenging economic environment of elevated inflation and slowing growth. Painful as it is for those laid off, it may be timely for the sector to take a breather. In the heady days of the tech boom, every other person seemed to be rushing to join a tech firm. Many of these start-ups were operating amid half-baked business plans. Others were burning funds on various projects even as venture capitalists had their eye out for the next big thing. It can only be good for the sector if businesses regroup and rework their business plans. Many will now be focusing on getting their core businesses back on track and be less distracted by peripheral activities. Corporate governance should be a priority, to boost investors’ confidence.

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