The latest layoffs in the IT sector do not sound like a good indicator for this year and the development of the domestic IT industry, which has definitely been one of the more potent export-oriented branches of our economy for years.
First is Italian Lottomatica, the gaming and sports betting firm laid off 348 employees – in one day, in the middle of business hours, so that US software company Zendesk fired 60 people with a plan to close the company in Serbia, and then the American gaming company Playstudios left, where about 100 people worked.
"There are indications that several more IT companies in Serbia are preparing to lay off part of their workforce, and this is primarily part of a global wave and has several causes," Zoja Kukić, one of the founders of Startit, told Vreme. "Serbia has not been a price-competitive destination for a long time when it comes to the salaries of engineers. Although this is an indicator that the industry is moving in the right direction, it affects decision-making."
Some of the foreign companies are also negatively affected by the fact that the Serbian system is mired in corruption, so it is often very difficult for those who are not "predatory investors" to do business without having to pay someone off, Mario Reljanović, professor of labor law, told Vreme.
Five hundred people fired in 10 days: Foreign IT companies are leaving Serbia
Everyone will know how to code, few will solve the problem
Kukić adds, the headquarters of foreign companies will generally look to keep employees at the headquarters if the costs are similar, and if the focus is on lowering costs - then they decide to open or expand development centers where labor costs are lower.
"The development of AI certainly affects these changes when companies do long-term planning, but these decisions are probably made primarily due to market conditions - the expectation that greater profitability will be sought in the coming period and part of that comes with a reduction in the workforce," she says.
Globally, the demand for programming positions is even increasing, but what is certain is that the types of profiles will change. Thus, the analysis of TrueUp.io, a platform that deals with employment in IT, showed that the number of open positions in America is at the highest level in the last three years.
"In order to be more resilient as an industry, we need to focus on a quick response to the AI transformation," adds Kukić. "In these companies, most of our employees concentrated on developing the skill of coding itself, and that is exactly what is now most replaceable with artificial intelligence." What will be required more in the future is an essential understanding of the problem in the code, a systematic thinking of how the problem can be solved from the technical side."
AI does not ask for pay and breaks, there is no union
The biggest effect of AI is on junior positions, so in some simpler areas of IT there is already global talk about artificial intelligence "erasing" entry-level positions.
"Serbia has been expanding IT for years, but the question is how prepared it is for AI," Mario Reljanović, professor of labor law, told Vreme. "Algorithms can replace people in those simple jobs, and they make fewer mistakes and don't ask for pay, breaks, and unionize."
He explains that this trend is not new, but that IT has yet to deal with its own fungibility and pressure. In many industries, such as textiles, factories do not reduce the number of workers because they are cheaper than machines, adds Reljanović.
However, some employers do not like corruption
Certain companies that left transferred part of their operations to the markets of the European Union, where programmers certainly do not earn less than in Serbia. This is where we enter the domain of legal security of the Serbian market, and therefore the political environment.
"A lot of predatory investors have come to Serbia, who are aware that they can drill loopholes in the law and use the corrupt system of functioning to do business more easily and cheaply. However, you also have people who do not want to do that. Some of them will raise their hands in the fight against the system and transfer their work abroad, and even that it is more expensive for them, especially companies that otherwise earn a lot and employ expensive labor," says Reljanović.
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