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Billionaire tech investor calls programmers 'the most scarce commodity on the planet'

Twitter employees are bracing for job cuts under Elon Musk’s leadership. Intel (INTC) is reducing headcount as part of a multi-billion dollar cost-trimming plan. Snap (SNAP) is slashing 20% of its workforce and might cut further.

At the same time, big tech companies like Microsoft (MSFT) and Amazon (AMZN), while slowing growth now, still have a higher number of employees than a year ago. And software development is still an in-demand skill, analysts say. That’s ahead of an October jobs report that economists predict will show the U.S. economy added 200,000 jobs last month.

“I like to say the most scarce commodity on the planet isn’t oil or lithium or cobalt, it’s actually software programmers.” So said Robert Smith, founder, chairman and chief executive at Vista Equity Partners, the private equity firm with $94 billion in assets under management and a concentration in enterprise software.

“There are seven and a half billion people on the planet," he added, "and only 29 million of us who write code for a living."

The data reflects strong demand for software developers. U.S. job openings unexpectedly rose in September. While the Labor Department doesn’t break out software developers in that report on a monthly basis, they fall into the category of professional and business services. Those openings rose 4.5% from a year earlier.

Robert Smith, Founder, Chairman and CEO, Vista Equity Partners, speaks at the Milken Institute's 21st Global Conference in Beverly Hills, California, U.S. May 1, 2018. REUTERS/Lucy Nicholson
Robert Smith, Founder, Chairman and CEO, Vista Equity Partners, speaks at the Milken Institute's 21st Global Conference in Beverly Hills, California, U.S. May 1, 2018. REUTERS/Lucy Nicholson

Job postings for software programmers are up 57% from February of 2020, according to Indeed.com’s Hiring Lab. That does represent a slowdown from a peak gain of 131% in March 2022 compared with February 2020, suggesting companies might be cutting back.

Still, the need for programmers appears to be a longer-term trend that’s not going away, even if there’s cost-cutting amid current economic concerns. An IDC analyst said that shortage isn’t limited to the U.S. One IDC report estimated that the global shortage of full-time developers would rise to 4 million in 2025 from 1.4 million last year.

“Many companies/recruitment agencies across Europe are looking at other talent pools such as South America and Asia to fulfill roles locally,” wrote Leonardo Bulgarelli Freitas, a research manager at IDC UK, in an email. “This used to happen before, but there seems to be an even higher uptick on hiring from outside of the continent.”

He noted that a recent IDC survey found software developers in the top five of roles in demand within information technology.

“These are the people who are actually providing and building these productivity tools that have to continue to enable and digitize not only companies, but entire economies in countries, in education, in cybersecurity,” Smith of Vista Equity said. “Those are the areas where we’re actually seeing that increased demand.”

Smith has been trying to contribute to closing that programmer gap — as well addressing the shortage of Black programmers and digital workers. After dramatically paying off the student loans of the graduating class of Morehouse University in 2019, the billionaire set up the Student Freedom Initiative, a nonprofit lending vehicle aimed at STEM students at minority-serving institutions.

“We have to activate more of our citizenry to be part of the digital revolution,” he said.

Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9am-11am ET. Follow her on Twitter @juleshyman, and read her other stories.

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