Recession prediction: It's terrible for project managers

The running total of layoffs for 2023 based on full months to date is 224,503. This is super bad for project managers. I'll explain why in just a second.

What's more important, layoffs will continue. But in addition to that, companies will start firing people because of performance.

Let me share what I see happening in the IT industry right now.

The fact is companies laid off workers in 2023 to adjust for slower growth predicted for 2023-2024.

That's because here's how a company works:

A company always plans for the growth. Even if it's a slight growth of 1-2% of annual revenue. But usually, it's much more than that. And there's a long-term plan as well as an annual plan for growth.

A growing company usually attracts investors. Investors provide money to support that growth.

As a result, this company increases the recruitment and talent acquisition departments to fulfill the needs of human resources. All these people go to new projects and initiatives to generate new income streams.

Likewise, the organization hires additional managers to onboard those new people and use them for new projects.

(Usually, if you aim for growth, you don't overload your existing managers. That's because it creates a risk to your core business.)

So, by the end of 2022, big tech companies sat on a massive pool of resources planning to grow their businesses in 2023. This pool of resources did NOT contribute to the core business.

Then, suddenly, investors pulled back their money. That's because they sensed that companies won't grow in 2023-2024.

As a result, companies had to cut down all the non-essential projects aimed at growth and innovation. But they kept people involved in the core business.

Usually, you can't do anything about a layoff. That is because a layoff is when a company must fire people because of unplanned external factors.

But companies will start firing people from core business projects next year. And you must safeguard your career as soon as possible.

Unfortunately, an economic decline is guaranteed until the end of 2024. And there's a good chance of a recession in the following 12 months.

Again, it means no business growth in 2024. And here's a critical part for you!

We are in Q4 already, which means lots of organizations are doing their annual planning for the next year right now.

Most of them will play safe for the next year. They will plan for minimal profit growth but with no increase in the headcount.

How will they achieve that? The answer is optimization!

• They'll trim the fat.
• They'll tighten the belt.
• They'll try to get the biggest bang for their buck (read your salary).

Actually, the performance optimization is already happening. Do you need a proof?

Have you been mandated to return to the office already? Don't worry. In 2024, it will reach you as well.

Big companies like Meta, Google, and Amazon have adopted the return to office strategy. The rest will follow the lead.

But that's nothing more than a way to impose more control on people. They want to ensure that every person contributes to the core business needs. In practice, it's easier to measure performance.

Additionally, it also means they'll optimize the costs of motivational efforts required for the work-from-home environment.

This is bad news for HR people, recruiters, and project managers. It means you'll have to do more work.

But it's even worse than that!

In these circumstances, working harder won't work. Putting in more hours won't keep you in the company.

You will have to work smarter. But that's the topic for the next email. So, keep an eye on your inbox.

For now, I predict that every project manager will get an extra project or initiative to lead. So, "running multiple projects in parallel" will become a critical skill.

Also, every single leader and manager will get an OKR, goal, or task to improve the performance of their teams and cut costs.

Can you guess what would be the default solution for a performance boost?

If you think about AI or ChatGPT, you are totally correct.

But here's the known truth:

Project managers don't contribute directly to core business. They enhance and improve the project management approach of an organization.

Obviously, you don't need technical skills to use AI tools.

Instead, you'll have to double down on your project management knowledge and skills.

That's because you'll need to be a connection between PM concepts and AI technical capabilities.

And every successful project manager knows that you need more than just basic management skills to lead such transformations. You need stakeholder management, organizational change management, and leadership skills.

But that's a future state. Right now, you should focus on keeping your job.

In the following email, we'll explore 3 top reasons why you may be fired during the next wave of layoffs. Stay tuned.

But before you go!

Please hit the reply button and share your thoughts. What do you think about possible layoffs and recession in 2024?

Thank you in advance!

🇺🇦 Dmytro Nizhebetskyi

IT PM School

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P.S. Hit the reply button and share your insights and resources about the 2024 recession. I would like to know your perspective.