Belgrade – A wave of layoffs is sweeping through Serbia’s IT sector, leaving hundreds of tech workers unemployed in recent months. While the rapid advancement of artificial intelligence (AI) is frequently cited as the primary driver, experts suggest a more complex picture, pointing to a confluence of factors including government economic policies and shifting global market dynamics. The situation is raising concerns about job security within a sector once considered a pillar of economic growth for the country.
The narrative of AI-driven job losses is gaining traction, but it’s not a simple equation. This month, the Italian gambling and sports betting company Lottomatica abruptly terminated the employment of 348 individuals at its Belgrade office, reportedly amidst a €639 million deal. Employees were informed of their dismissal during their shifts, with little to no prior notice, according to reports from Money.bg. Lottomatica, in statements, indicated the move was part of a broader strategy to enhance efficiency through the integration of an internal platform leveraging AI for customer service and query processing.
However, the speed and manner of the Lottomatica layoffs have fueled skepticism. “It’s convenient to blame AI,” says Dragan Stanković, an economic analyst based in Belgrade, “but these companies are often restructuring for profitability, and AI is being used as a justification, not necessarily the sole cause.” He points to broader economic pressures and the increasing competitiveness of the global IT market as significant contributing factors.
Beyond AI: A Multifaceted Crisis
The Lottomatica case is not isolated. In March alone, over 500 IT professionals in Serbia lost their jobs as three companies ceased operations or significantly downsized. American software firm Zendesk recently shuttered its Belgrade office, impacting 60 employees. Prior to that, Playstudios, a US-based gaming company, closed its Belgrade location, leaving an estimated 100+ workers without employment. These closures, while often framed in terms of streamlining operations and adopting AI, also reflect a wider trend of companies reassessing their international footprints.
The IT sector, while offering comparatively high salaries, has historically been susceptible to periodic waves of layoffs. This global phenomenon has been amplified in recent years by economic uncertainty and the rapid evolution of technology. Serbia, with its relatively lower labor costs, has been a popular destination for IT outsourcing, but that advantage is diminishing as other countries emerge as competitive alternatives.
“We’re seeing a recalibration of the IT market,” explains Milena Jovanović, a career consultant specializing in the tech industry. “Companies are focusing on highly specialized roles and are less willing to maintain large teams for routine tasks that can be automated. This means that while there’s still demand for skilled IT professionals, the landscape is becoming more competitive, and the need for continuous upskilling is paramount.”
Government Policies and the Investment Climate
Experts also suggest that Serbian government policies may be playing a role in the current situation. While the government has actively promoted the IT sector through tax incentives and infrastructure development, some argue that a lack of long-term strategic planning and inconsistent regulatory frameworks are hindering sustainable growth.
“The government has been reactive rather than proactive,” argues Stanković. “They’ve focused on attracting foreign investment, but haven’t done enough to foster a strong domestic IT ecosystem. This makes the sector vulnerable to external shocks and the decisions of multinational corporations.”
The recent layoffs have prompted calls for greater government intervention to protect IT workers and promote domestic innovation. Trade unions are demanding stronger labor protections and increased investment in retraining programs to assist displaced workers acquire new skills.
The Global Context and Future Outlook
The challenges facing Serbia’s IT sector are mirrored in other countries around the world. Major tech companies, including Google, Microsoft, and Amazon, have announced significant layoffs in recent months, citing economic headwinds and a slowdown in growth. Similar trends are being observed in neighboring Bulgaria, where the IT market is also shifting towards more specialized roles.
The increasing influence of AI is undeniable, but its impact on the IT job market is nuanced. While AI is automating certain tasks, it is also creating new opportunities in areas such as AI development, data science, and machine learning. The key for Serbia, and for IT professionals globally, is to adapt to these changes and embrace lifelong learning.
Looking ahead, the Serbian government is expected to announce a new package of measures aimed at supporting the IT sector. Details are still emerging, but officials have indicated that the focus will be on attracting high-value investments, promoting innovation, and strengthening the skills of the workforce. The next official update on these measures is scheduled for release in late April, according to a statement from the Ministry of Economy.
The current situation serves as a stark reminder that even thriving sectors are not immune to economic disruption. The future of Serbia’s IT industry will depend on a combination of factors, including government policies, global market trends, and the ability of IT professionals to adapt to the evolving demands of the digital age.
What are your thoughts on the impact of AI on the IT job market? Share your perspective in the comments below.
