Job growth in Utah’s tech sector is stagnant, a report says. Here’s why.

Utah’s tech industry ‘over-expanded’ and is ‘swinging the other way,’ an economist said — but there’s cause for optimism.

(Chris Samuels | The Salt Lake Tribune) Layoffs — such as those last October at the software firm Lucid — have defined Utah's tech sector for the last two years, but the industry is expected to grow again in the next decade, a new report predicted.

Utahns are more likely to work in the tech sector than workers in 41 other states — and the state is home to one of the country’s biggest concentrations of tech workers, in relation to the overall workforce.

That’s according to a new ”State of the Tech Workforce” report, released earlier this week by CompTIA, a national association of tech workers.

However, federal and state employment data also suggests that growth in Utah’s tech sector has stalled in recent years.

Employment in Utah’s tech sector grew a fraction of a percent from 2022 to 2023, according to CompTIA’s report, which analyzed data from the Bureau of Labor Statistics. But it receded again in 2023, according to state employment data.

There were nearly 2,000 fewer jobs in what the state classifies as the “Computer Systems Design and Related” sector this past February than there were in February 2023, and roughly 100 fewer jobs in “professional, scientific and technical services.” Utah’s tech employment growth also trailed behind national industry trends, according to the CompTIA report.

That’s perhaps unsurprising to the hundreds of tech workers at such Utah companies as Pluralsight, Qualtrics and Lucid who lost their jobs in the last year.

It’s also not that surprising to economists like Robert Spendlove, economic and public policy officer at Zions Bank.

The tech sector is a “growth industry,” Spendlove said — meaning that it grows and evolves more quickly than other industries. But it’s also more vulnerable to such factors as federal interest rates, which have grown every year since 2021.

High interest rates restrict access to capital, Spendlove said. Three years ago, when interest rates were low, growth industries like tech were able to borrow more money.

“Startups expanded because they had lots of money to access,” he said. And as interest rates increase, the “spigot” closes a little further.

“Some sectors get hit very quickly,” Spendlove said, and Utah’s tech sector “got hit really quickly, and pretty dramatically.”

Utah’s tech sector also came out of the pandemic “really strong” relative to other industries, Spendlove said. Tech companies rode the momentum of low interest rates and access to remote workers further than they could reasonably sustain.

The industry, Spendlove said, “over-expanded,” and now it’s “swinging the other way.”

For tech workers, that means fewer jobs to choose from and an increased risk of losing the jobs they already have.

For Utah at large, that means stagnation in an industry with a roughly $22 billion influence on the state’s economy, according to CompTIA’s report.

But the industry is expected to grow again this year, according to CompTIA’s predictions, by as much as 5%. And tech jobs pay more, on average, than the state’s median wage.

A white, male workforce

Utah’s tech workforce is also less representative and diverse than the state’s overall workforce, according to CompTIA.

For example, women, who made up 46% of the state’s overall workforce in 2022, made up just 22% of Utah’s tech workforce that year.

Also, there were half as many Hispanic or Latino workers in tech as there were in all industries statewide, and just 1% of Utah’s tech workers were Black.

Not done growing

CompTIA’s prediction that Utah’s tech industry will grow this year by as much as 5% mirrors national projections by the Bureau of Labor Statistics’ projections, which have the tech workforce in the United States growing twice as fast as the workforce at large.

CompTIA predicts Utah will lead the charge in job growth over the next 10 years, with the workforce growing by 33%.

Spendlove agreed, saying that he thinks Utah’s tech sector may be at or near the “bottom” of the contraction curve, meaning things could start looking up soon. Recent investments in hardware production, plus an insatiable demand for developing A.I., have sustained the industry, and could help it grow again in the near future, he said.

How does it feel?

These reports are just the data. They do not account for personal experiences of Utahns in the tech industry. The Salt Lake Tribune would love to hear from those workers. If you work or used to work in Utah’s tech industry, please take our survey here:

Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.