The Ukrainian IT sector faced significant challenges in 2023, both due to the war and negative economic trends. The number of job vacancies decreased by an average of one-third. According to a study by Work.ua, at the beginning of the full-scale invasion, the job market for the IT sector plummeted by 7 times – from 9.8 thousand to 1.3 thousand vacancies. In September 2022, after reaching a peak of 4.9 thousand job offers, IT vacancies began to decline again.
Over the past 2 years, there has been a trend of downsizing in the global IT industry. In 2022, a number of international companies began layoffs, which continued into 2023. Both startups and tech giants like Amazon, Google, and Microsoft were letting go of staff.
The year 2023 marked a turning point for the Ukrainian IT industry. For the first time in history, the export of IT services decreased by 8.5%, as reported by Lviv IT Cluster. While not entirely unexpected, this news signifies the new realities that the IT sector is facing.
Over 50% of surveyed companies resorted to putting their employees on the bench due to a lack of projects. Finding new clients has become increasingly challenging amidst the war conditions, leading to a reduction in work volumes. According to Lviv IT Cluster, in 2023, 12% of IT professionals temporarily had no projects.
The conditions of being on the bench vary. 14.8% of IT specialists received no compensation during this time, while 30.4% received only partial compensation. 25% of specialists who found themselves on the bench were able to return to work later. The situation becomes critical for 7% of respondents who couldn't find a new project for over six months.
The decline in the export of IT services is not just about numbers. It signals that the Ukrainian IT sector, which has been a cornerstone of the Ukrainian economy for many years, needs a new development strategy.
Can the Ukrainian IT sector return to a path of sustainable growth? What awaits the market in 2024? According to the IT Research Ukraine 2023 study, the number of IT specialists in Ukraine increased by 8%, and their average salaries rose by $270.
The following IT professions are expected to be in high demand in the coming years:
Artificial Intelligence and Machine Learning. These technologies are transforming all spheres of life, leading to an increasing demand for experts in this field. Proficiency in programming languages and technologies such as Python, R, PyTorch, TensorFlow, as well as understanding machine learning algorithms, is necessary for this field.
Cybersecurity. Cyberattacks are becoming increasingly dangerous and widespread, driving continued demand for cybersecurity professionals. Skills required for work in this field include ethical hacking, cyber attack analytics, and software and infrastructure security.
AR/VR. Augmented and virtual reality are promising technologies with development potential. Skills needed for work in this field include programming, 3D modeling, and interface development.
Video game development. Gamers represent one of the largest audiences in the world, leading to high demand for video game developers. Skills required for work in this field include programming, 3D modeling, art, and design.
Cybersecurity and defense activities. Ukrainian IT companies are growing in their capabilities for cyber threat protection, country defense, and challenges. An increase in the development and creation of new projects in defense activities is expected in 2024.
Product companies in Ukraine are becoming more attractive to IT specialists. According to Djinni analytics, the share of vacancies from product companies increased from 36% in May 2021 to 55% by the end of 2023. Meanwhile, the share of vacancies from outsourcing and outstaffing companies decreased from 61% in May 2021 to 36% by December 2023. Currently, we understand that the number of vacancies in product companies in 2024 may continue to rise, becoming one of the main trends.
Based on DOU statistics in January, we can see a total of +1665 vacancies compared to December, totaling 5057 for the month. There were 417 more companies than in December publishing vacancies – 1595. This is the best indicator since the start of the full-scale invasion. Among the reasons is the market picking up after the New Year holidays. Front-end took the lead in terms of the average number of responses to a vacancy, with a record-high 110.7 responses. Conversely, QA saw a slight decrease in the average number of responses to 101, likely due to an increase in vacancies in January (+62). Despite the increase in the number of vacancies in almost all categories, the average number of responses per vacancy increased in 23 of them. Candidates in January also became more active in responding.
Ukrainian companies are trying to diversify risks and seek new clients, opening offices in other locations. The year 2024 is expected to be challenging for all participants in the IT market. 58% of companies have terminated contracts with clients, and 24% of companies have lost more than 41% of their revenue. Only 49% of companies have potential contracts for a long period. 2024 will be a tough year for the IT market, but not hopeless. Product companies may become the driving force behind positive changes, and adaptability and readiness for new conditions will help candidates and specialists find their place in the market.