ANIS: Romania’s IT workforce declines in 2023 amid fiscal facility cuts

According to data presented on Wednesday by the Employers’ Association of the Software and Services Industry (ANIS), in a study carried out by specialists from the Academy of Economic Studies, the number of employees in the IT sector in Romania decreased moderately in 2023. In 2022, the number of employees had grown rapidly and had reached the threshold of 200,000 people. But in 2023, the number fell below this threshold and Romania ended up employing only 190,152 IT professionals.

Until recently favored by a series of fiscal facilities such as income tax exemption, last year the Government eliminated this facility for the industry. At the same time, the global IT industry has gone through a series of turbulences due to major changes at the global level, such as the emergence of artificial intelligence, problems in the automotive sector, where much of the IT sector works, a pause in attracting global funding for tech companies or reaching an oversaturation of employees following the massive recruitment in IT from the pandemic. All these problems were also reflected in Romania, where several IT companies announced layoffs last year, but also this year. And in the future, other facilities that this sector still benefits from could be cut. The industry says such measures “cut the momentum of local companies”.

A first wave of layoffs in the IT industry took place at the beginning of 2023, followed by a new wave of staff reductions in the fall, and this year, the trend continued.

The beginning of spring was marked by the news that one of the largest companies in the country, NTT Data, based in Cluj, is laying off people. Later, Gameloft decided to close the studio in Cluj-Napoca and lay off more than 130 employees. Also, Atos employees later accused the company of disguised dismissals, by changing the remote work conditions.

After eliminating the tax exemption for most IT employees last year, the Government could delete all facilities for the sector from next year to reduce the budget deficit, according to the tax plan to be submitted to Brussels. Edward Crețescu, the president of ANIS, said on Wednesday that such a measure would have a “strong negative impact” on Romanian IT firms and would cut off the momentum of local companies.

“Of course, it has a strong negative impact. It is quite easy to understand why, because the industry is in full swing, growing significantly, and any reduction in fiscal facilities cuts the momentum of companies in Romania that start producing their own software, start exporting, try to get contracts from outside. So any reduction affects us very strongly”, said Edward Crețescu.
The ANIS representative says that, although he understands the Government’s need to attract money to the budget, in the long term the state would actually gain more if it maintained the tax facility for IT.

The study also shows that, although the sector is partially exempt from tax and has other facilities, in 2023, the tax contributions of IT employees were the highest in the economy, reaching 55,777 lei per employee. Followed by professional, scientific and technical activities, administrative services activities and support services activities – 29,675 lei and industry – 28,341 lei.

The IT sector was the second contributor to the budget in terms of fees and taxes paid, with an average of 76,992 lei/employee.

2023ANISdecreasedemployeesemployers association of the software and services industryfiscal facility cutsITIT workforceRomania
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  • Panagiotis Spyridis

    Social justice in the fiscal burden equality is key to a Democracy. Keeps society calm and equally productive.