A Worrying Decline in Software Job Postings
A bit of a scary chart from Visual Capitalist is doing the rounds, showing a steep drop in software development job postings. From a sharp post-pandemic surge that took demand up by nearly 140%, we are now sitting at almost -40% below the baseline. It’s quite an eye-opener. If this is even remotely indicative of the larger IT services demand picture, especially globally, it could mean a period of stagnation or contraction ahead.
Sectoral Leadership Can Shift Quickly
Looking at broader sectoral performance over the last 9 years, IT was a laggard in 2016-17 but came back roaring between 2018 and 2021, consistently featuring among the top performers. But then came 2023, where IT took a backseat, and 2024 has so far been neutral. What’s also worth noting is that even with political stability and a new government in place, there hasn’t really been a strong pro-IT policy boost, especially not for global outsourcing or talent on H1B visas.
The Bigger Lesson: Avoid Sectoral Biases
This isn’t to dishearten those in the IT industry or those invested in it, but rather to highlight how sector performance is never linear. It’s easy to get attached to a sector because of personal affiliation or past performance, but markets don’t move based on sentiment or loyalty. They move based on actual data, earnings, flows, and trends.
Adapt to Rolling Sectoral Cycles
Just look at the way leadership has changed — from IT and real estate in 2020-21, to PSU banks and CPSUs in 2022, and then autos and real estate again in 2023. If you were fixated on one sector, you would’ve missed the bus on others. That’s why momentum-based or trend-following strategies often outperform — they shift allocations to sectors that are actually moving.
Final Thoughts on Smart Investing
So the big takeaway is this: keep an open mind. Don’t assume past winners will continue to win. Whether you’re investing actively or passively, be mindful of sectoral trends. Check whether the stocks or sectors you’re betting on are really showing forward strength before you continue to hold them. That mindset is what separates emotion-driven investing from performance-driven investing.
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