Wed Apr-10-2024: State of the Tech Workforce 2024,Cloud Cost Overruns, Geek Squad Layoffs

[00:00:00] It's Wednesday, April 10, 2024, and I'm Dave Solb, three things to note today. The state

[00:00:08] of the tech workforce 2024, CompTIA predicts 3% growth and 300,000 new tech positions. Cloud

[00:00:17] Cost Overruns IT leaders brace for spending to surpass $1 trillion by 2026 per Forester

[00:00:25] and Best Buy's Geek Squad bases mass layoffs amid financial rebalancing and AI focus. This

[00:00:34] is the Business of Tech.

[00:00:37] Looking to reach an audience of thousands of MSPs and IT service providers? Put your ad

[00:00:42] right here on the Business of Tech, and be on the show that 64% of MSPs report having

[00:00:49] listened to. A recurring top 50 tech news podcast, there are affordable options for you to reach

[00:00:56] our audience and we can support any budget. Podcast listeners are more engaged, have a

[00:01:01] higher level of brand retention, and are more willing to listen to ads here than any

[00:01:07] other avenues. Want to know more? There's information at MSPRadio.com slash engage

[00:01:14] including a button to book a time to talk. I'm looking forward to that discussion.

[00:01:23] I'm back from some time off and the best place to start is to see what conditions are like

[00:01:27] on the ground, right? The Institute for Supply Management Services Index fell to 51.4

[00:01:34] in March, indicating a drop in expansion and a lower worry about supply chain issues.

[00:01:41] However, new data from ADP shows that private employers added 184,000 jobs in March, surpassing

[00:01:49] analysts' expectations. Pay gains remain steady for those in their jobs but surged for job

[00:01:55] changers, raising concerns about inflation. According to CompTIA's analysis of US Bureau

[00:02:02] of Labor Statistics data, tech hiring exceeded expectations in March with technology companies

[00:02:08] adding 6,000 workers and technology occupations throughout the economy increasing by 203,000.

[00:02:16] The unemployment rate for tech occupations dropped to 3% and there were 191,000 new job postings

[00:02:23] for tech positions, the highest volume since August 2023.

[00:02:28] CompTIA also released their State of the Tech workforce 2024, forecasting a 3% growth

[00:02:35] in the tech workforce and adding 300,000 new positions this year. The report suggests that

[00:02:41] US technology employment is expected to see a brighter outlook this year with 20 states

[00:02:46] and 14 metro areas exceeding the average growth rate. Long-term projections show that

[00:02:52] tech occupation employment is expected to expand at about twice the overall employment

[00:02:57] rate in the US economy. Axios notes unemployment rates have risen in some populous states

[00:03:04] in the US indicating pockets of weakness in the labor market. The job market now appears

[00:03:09] more uneven with certain regions missing out on the job opportunities available in other

[00:03:15] states. California and Nevada have experienced significant increases in unemployment rates

[00:03:21] while swing states like Arizona and Wisconsin have also seen upward movements. Despite

[00:03:27] this, many states with rising jobless rates still have historically low unemployment. The

[00:03:34] labor market in California has been affected by weakness in the tech sector resulting in

[00:03:38] layoffs. According to Gallup's annual survey, Americans

[00:03:43] are less stressed about the economy and inflation than last year but more worried about illegal

[00:03:48] immigration. Immigration is now the top unprompted issue of concern with Republicans

[00:03:54] showing the highest level of worry at 73%. Consultancy KPMG's monthly supply chain stability

[00:04:02] index, made with the Association for Supply Chain Management shows a decline in the

[00:04:07] initial months of 2024 to the lowest point since February 2021. A lower measurement means

[00:04:13] less stress in the supply chain. According to the quarterly company earnings call

[00:04:19] Analysis by IoT Analytics, the key themes discussed by CEOs in Q1 2024 were AI, sustainability

[00:04:28] and elections. AI discussions focused on individual technologies like GPUs and LLMs while

[00:04:35] sustainability saw a resurgence with keywords related to energy efficiency and renewable

[00:04:40] energy. The mention of recession declined but inflation saw an increase. The decline

[00:04:47] in mentions of chatGPT and war was also observed. The Russell 2000 at Proxy for Small Businesses

[00:04:54] has been down in the past two weeks and slightly down for the year. The SMB 600 which looks

[00:04:59] at the smallest companies was steady in the past two weeks and is slightly down on the

[00:05:03] year. Why do we care? We note the dip in supply chain worries as I recently reported

[00:05:10] about how SMBs are as concerned about supply chain issues as cybersecurity ones. That

[00:05:15] concern may fade over the course of the year, likely will be replaced with political concerns

[00:05:20] in the US in the second half of this year. If the insight is to note the trend line then

[00:05:26] take note that AI is broadly rising, chatGPT specifically dipping as a focal point, inflation

[00:05:32] concern trends are down yet not entirely gone. Now I want to hit some specific

[00:05:39] technology views from Channel Insider at the 2024 Channel Partners Conference and

[00:05:45] Expo. IT partners in industry forecasters discussed the evolving landscape of IT service

[00:05:51] delivery. Despite economic headwinds, the IT market is projected to grow at 6.2% with

[00:05:57] businesses and governments estimated to spend 4.94 trillion on IT and telecommunications

[00:06:03] in 2024. According to research conducted by Forrester, IT leaders expect their cloud

[00:06:09] cost to exceed budgets with public cloud spending forecasted to reach over one

[00:06:14] trillion globally by 2026. The survey found that cloud workloads and costs are expected

[00:06:20] to grow rapidly over the next two years. Excessive storage, overconsumption of network

[00:06:25] bandwidth and a lack of integration strategy and efficient cloud architectures

[00:06:30] contribute to rising cloud costs. The report suggests that cloud architecture

[00:06:35] integration and modernization initiatives can help reduce cloud spend and improve

[00:06:40] cost management. Pinpoint Search Group has released its Q1 2024

[00:06:46] cybersecurity funding report showing an increase in the number of transactions

[00:06:50] compared to Q1 2023 despite a decrease in total funding raised. The report suggests

[00:06:57] that the increased interest in later stage rounds could indicate better times

[00:07:02] ahead for cybersecurity funding. Why do we tear? Cybersecurity is cooling as an

[00:07:08] investment space. We'll keep an eye there but there are only so many

[00:07:12] cybersecurity companies needed. Let's not sleep on the cloud continuing

[00:07:17] sweep up customer investment. Former employees of Best Buy's Geek Squad

[00:07:24] report mass layoffs with individuals receiving short notice and being let

[00:07:28] go due to financial constraints. Best Buy's CEO mentioned the redirection

[00:07:34] of corporate resources toward areas like AI and lower industry sales as a

[00:07:38] reason for the layoffs. The company is also focused on driving efficiencies in

[00:07:43] Geek Squad repair operations and exploring opportunities in Best Buy health.

[00:07:49] The layoffs are part of a larger effort to right size the business and

[00:07:52] update store departments. The jobs high turnover rate and relatively low

[00:07:57] pay have been noted by current and former Geek Squad employees.

[00:08:02] Why do we care? So I wanted to cover this as it concerns specific layoffs and a

[00:08:07] large player in the IT services market. It's very popular to dismiss Best Buy.

[00:08:13] I want to observe that just as not every IT provider is best in class,

[00:08:18] neither is every customer or customer segment. Geek Squad serves

[00:08:22] residential and SMB businesses and some level defines the base of

[00:08:27] expectations. They do matter. Do I believe the AI reasoning? No, not yet.

[00:08:35] That said, AI could make quite a difference in basic support options and

[00:08:40] a larger company certainly will be able to leverage it.

[00:08:46] Thanks for listening. It's nice to be back. Today is National Hug Your

[00:08:49] Dog Day and National Siblings Day. So a shout out to my siblings.

[00:08:55] Have a question you want answered? We do take lists for questions.

[00:08:58] Send them ideally as a voice memoir video to question at MSPRadio.com.

[00:09:03] I answer lists for questions live each week.

[00:09:05] Normally Wednesdays, there'll be a live show tomorrow, Thursday the 11th.

[00:09:10] And if you've got a comment or a thought on a story, put it in the

[00:09:13] comments if you're on YouTube or reach out on LinkedIn if you're

[00:09:16] listening to the podcast. Talk to you again tomorrow.

[00:09:20] The business of tech is written and produced by me, Dave Sobel,

[00:09:24] under ethics guidelines posted at businessof.tech.

[00:09:28] If you like the content, please make sure to hit that like button,

[00:09:32] follow or subscribe. It's free and easy and the best way to support

[00:09:36] the show and help us grow.

[00:09:38] You can also check out our Patreon where you can join the business

[00:09:42] of tech community at patreon.com slash MSP radio or buy our

[00:09:47] Why Do We Care merch at businessof.tech.

[00:09:51] Finally, if you're interested in advertising on the show, visit

[00:09:54] MSPRadio.com slash engage.

[00:09:58] Once again, thanks for listening to me.

[00:10:00] I will talk to you again on our next episode of The Business of Tech.

[00:10:07] Part of the MSP radio network.