How is the Ed Tech industry being affected by the decline of investment in the broader technology sector? Given the headlines about big tech layoffs, should professionals be worried about starting or continuing a career in the Ed Tech industry?
In this blog, we explore the answers to these questions. While changing financial conditions are a reality for any industry, our experience confirms that there are still robust, diverse job opportunities with a broad array of Ed Tech employers.
What is the investment cliff in Ed Tech?
In general, 2022 was a rough year for technology companies. Tech stocks fell more than 30% over the course of the year, even more than the overall market drop of 20%. This turn of events was particularly jarring for a tech sector that had long been enjoying boom times.
In 2022, CNBC noted that at the end of 2021, “hiring was booming and tech employees were frolicking in the high value of their stock options. Twelve months later, the landscape is markedly different. In total, investors have lost roughly $7.4 trillion, based on the 12-month drop in the Nasdaq.”
These investor losses have translated directly to consequences for executives, employees, and job-seekers alike. The same report notes that :
“There’s plenty of pain to go around. Companies across the industry are cutting costs, freezing new hires, and laying off staff. Employees who joined those hyped pre-IPO companies and took much of their compensation in the form of stock options are now deep underwater and can only hope for a future rebound.”
Fortunately, 2023 has seen a rebound of cautious optimism for technology investors. However, the tech sector remains far below its peak valuations. And it’s only reasonable for job seekers to be worried as layoffs continue (Crunchbase provides a helpful tech industry layoffs tracker here). Interest rates are high, and they may remain so for some time, which means investors are rewarding companies that are generating cash now versus promising to at some date in the future.
Should job seekers worry about the investment cliff in Ed Tech?
Like the broader technology industry, Ed Tech companies are navigating tighter financial conditions. But it’s important to recognize that a dip in investment does not mean the end of rewarding job opportunities! The Ed Tech industry has a critical long-term mission to improve outcomes, equity, and accessibility in education, and this underlying need is going nowhere. In an interview with TechCrunch, Ed Tech venture capitalists Ashley Bittner and Kate Ballinger note that:
“The pandemic has not necessarily changed our thesis but has accelerated many of its underlying trends. We saw millions of people move to remote work and learning overnight, opening up massive opportunities around remote and distributed training. The economic recovery from the pandemic has been one of the most unequal in history, with a large number of women and other marginalized groups leaving the workforce altogether. This has only further emphasized the need to build solutions, in Ed Tech and beyond, that are working to close these opportunity gaps.”
As with any industry, changing financial conditions will affect profitability, investor sentiment, and employment prospects. And Ed Tech, like any industry, will have its ups and downs. However, we see robust evidence that hiring remains strong in Ed Tech. The future of Ed Tech is still bright! As the operator of the largest industry-specific job platform in Ed Tech, HighFive Partners can attest to this fact, with tens of thousands of jobs and nearly one thousand employers currently hiring on our platform. Bittner and Ballinger confirm this experience in their interview, noting that:
“It is important to acknowledge that this slowdown looks different from past downturns like the Great Recession. We have not seen a sharp increase in unemployment — as of May 2022, unemployment was just 3.6%, compared to 5% at the start and 10% at its peak during the 2008 recession — largely due to the tight labor market that emerged from the pandemic and the Great Resignation. We still see job openings and turnover at record highs, and many companies are not planning to cut back on hiring, let alone turn to layoffs.”
Find Ed Tech Companies Hiring Now
We think a career in Ed Tech can be immensely rewarding, and the ebbs and flows of the stock market should not dissuade you from pursuing Ed Tech positions that are a fit for your personal career goals.
For a deeper look at six reasons to consider a career in Ed Tech, please see our blog post here.
Or, if you are ready to get started looking for the right position for your personal needs and goals, we invite you to sign up for our jobs platform here. As you will see right away, there is no shortage of positions to explore, even in the wake of the biggest cliff for tech investment in many years.
