However, they plummeted for FAANG & Big Tech companies.
Meanwhile, the big news for January 2023 was the mass layoffs, which were worse than in November 2022.
Let’s break these trends down to make sense of the data science job market at the start of 2023:
Job postings rose back in January 2023 after four consecutive months of falling postings. Openings increased across all data science & engineering roles.
In January 2023, job listings in data science & engineering roles rose by 13% month over month.
However, January had a new wave of mass layoffs. In total, there were over 84,000 layoffs in January 2023 (layoffs.fyi). This continues the trend that started in November 2022 when Meta laid off 13% of their workforce.
In January 2023, Google, Microsoft, and Amazon were the three companies that laid off the most workers.
Mass layoffs may result in high competition for new job openings. Many highly qualified candidates have entered the job market, so newcomers could face a hard time competing for jobs.
Looking at the Levels.FYI report and data submitted on Interview Query, we’ve seen a 10% drop in salaries year over year.
This has to do with two concurrent trends:
First, the highest-paying companies stopped hiring. FAANG companies offered the highest salaries in tech and went into a hiring freeze. This hurts the average hiring salary for new job openings.
Second, new job offer salaries decreased across a lot of positions. However, much of this has to do with companies not offering above-band salaries anymore rather than an actual lowering of the bands. For example, an insider source told us that Amazon used to repeatedly go over 50% above the bands before 2022 to compete on talent.
Most Big Tech companies have grown rapidly over the last four years. Many even doubled their headcount. To keep up with their growth, they needed to expand their roles in senior management.
To illustrate this point, Meta went from 36,000 to 87,000 employees in four years before their November 2022 mass layoffs.
While openings are up in the overall tech job market in January, they continue to plummet for FAANG companies.
In just one year, FAANG’s share of tech job openings dropped from 5.7% to 0.4% of the total job market.
Included in this and the following analyses of FAANG were similar companies like Uber, Airbnb, Lyft, and Microsoft.
This fall in FAANG’s share of openings was the result of two trends:
FAANG job openings dropped by 90% year over year. Meanwhile, the number of openings in the tech industry grew by 30% outside of FAANG.
For this January, postings for FAANG companies dropped 41.3%. Outside of FAANG, openings grew 17.7% month over month.
Apple is the only exception for FAANG.
While others doubled their headcount in recent years, Apple only grew by 19%. According to a recent article by Bloomberg.com, “many tech companies admit that they hired too much during the pandemic” based on lifestyle changes they projected.
Meanwhile, Apple was “more cautious” with its headcount growth. Now, Apple is the only FAANG company that hasn’t conducted mass layoffs and continues to hire data scientists tableas usual.
TikTok is the only growth tech company that’s still hiring large numbers of employees. They’re the only large growth company still growing their user base.
Other established companies projected future growth by moving into new technologies. Such was the case with Meta and Virtual Reality. However, the recession drew investments away from projections and promises, which hindered new lines of growth.
Meanwhile, TikTok’s popularity grew to the extent that the scrollable short video feature was copied by Instagram’s Reels and Youtube Shorts.
Their sustained growth allows them to continue hiring as usual despite the recession.
2 - Walmart and supermarket chains are more resilient to the recession
Grocery demand is highly inelastic, so the recession didn’t hit as hard for grocery chains.
These companies are data-driven because of their sheer volume. For example, Walmart sells over 70 million products to around 275 million clients. The large amounts of generated data are translated into business insights to increase profitability.
3 - Banks & Fintech are still hiring actively
While Big Tech jobs plummeted, banks & financial firms are still offering hundreds of unique data science job openings.
The current recession in Big Tech hit banks as well. However, banks & fintech companies are still hiring data scientists for crucial day-to-day operations, such as fraud prevention analytics and risk management. Meanwhile, most data scientists in Big Tech work in R&D trying to increase future growth and profits. These companies froze hiring because they don’t expect much growth in recession times.
4 - The Health Sector still Demands Data Scientists
The situation for the healthcare industry is similar to that of supermarket chains: It’s a necessity, so demand doesn’t diminish much during recessions.
Currently, CVS Health ranks third among companies with the largest number of open positions for data professionals and fourth among companies offering the most opportunities in data science roles.
5 - AirBnB Data Scientists became Data Analysts
At Airbnb, data scientists that used to work with SQL and data visualization have recently been recategorized under the title of “data analysts”.
This is part of a general trend within the job market, where job openings and positions are shifting from data science to data analytics due to the recession.
Openings for data professionals grew the most for data analytics in January 2023.
Data analytics openings grew by 17.5% month over month, while data science openings grew by 14.8%.
Compared to last January, data analytics and data engineering openings increased, while data science and ML engineering openings decreased.
Meanwhile, data science postings have dropped by half compared to last January.
This shift toward data analytics makes sense during a recession.
We saw that basing hiring on projected growth hurt most of Big Tech. Companies are now focusing their hires on current needs to play it safe.
Therefore, R&D divisions such as data science and research are getting more cuts, and January’s hiring is in revenue divisions. Data analysts prioritize business-facing initiatives and actionable insights rather than long-term predictions.
The shift from data science is evident when we look at how the market share for the different data job openings has evolved in the past year.
As we can see, data analytics peaked in January 2023 – comprising almost 50% of all data science jobs out there today. Meanwhile, the share of jobs for data scientists fell from 28% to 15%.
A rule of thumb to survive in today’s market is to add value quickly: either build useful infrastructure (data engineering) or find fast and actionable insights (data analytics). Costly long-term predictions are not as profitable right now.
Prepare for the current job market with our data analytics learning path!