Estonia's IT industry starting to feel effects of economic crisis
Estonia's IT industry is starting to feel the effects of the economic crisis and redundancies have already been announced. The Unemployment Insurance Fund said other sectors made staffing cuts last month.
On Tuesday it was reported that Pipedrive will lay off 143 employees and approximately half of the redundancies will be made at the company's Tallinn and Tartu offices.
Agur Jõgi, Pipedrive's chief technology officer, said momentum has slowed in the IT sector. The cuts will mean laying off 13 percent of the firm's workforce, he told Tuesday's "Aktuaalne kaamera".
"It's not that there is no longer a demand for good IT people, but the growth and pace has slowed and we need to respond accordingly," he said.
The company primarily works with small businesses and these firms are some of the first to feel the impact of difficult economic conditions.
"On the other hand, the positive thing is that when the economy changes, small businesses are the first to bounce back with new ideas," Jõgi told AK.
The manufacturing sector has also been hit, the Unemployment Insurance Fund said, such as the wood industry.
Usually, the organization is given a month's notice if a company is planning a round of collective redundancies.
"If we take 2020 as a comparison, where there were pandemic redundancies, there were just over 200 notifications throughout the year and around 7,500 jobs were lost. Now there have been 96 notifications this year and around 2,700 jobs lost," said Karin Andre, head of the fund.
She said the announcements show there is a "cooling" in the economy and there are also fewer job offers being advertised this autumn.
SEB economic analyst Mihkel Nestor does not believe mass redundancies are on the cards at the moment but agrees unemployment figures are ticking upward.
"Registered unemployment has moved upwards in an upward trend, but it is not something very broad-based at the moment. It has been noticeable in the manufacturing sector and especially in the part of the economy that was somehow linked to the Swedish real estate market," he said.
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Editor: Barbara Oja, Helen Wright
Source: Aktuaalne kaamera