Tech Temperature: Signs of Recovery in the Tech Industry, but the Job Market Is Lagging Behind
The Swedish tech sector is showing signs of recovery. Growth has strengthened across much of the industry, financing terms have improved, and more tech companies are being launched. At the same time, the recovery remains fragile and has not yet had a clear impact on the labor market. Hiring remains cautious, and layoff notices remain at a high level. This is shown by TechSverige’s new Techtemperatur, an indicator of the economic situation in the tech industry.
Three out of four segments of the tech industry grew during the first half of 2026. Retail and services saw the strongest growth, while software and IT services, as well as hardware manufacturing, also performed well. Telecommunications and infrastructure, on the other hand, declined slightly.
“There is momentum in the Swedish tech sector. After a prolonged period of weakness in which the economic downturn took its toll, activity is picking up across large parts of the industry. But the picture is mixed; many IT service companies still have insufficient order volumes,” says Christina Ramm-Ericson, chief economist at TechSverige.
The labor market is lagging behind
During the first quarter, there were 7,900 job openings in the tech industry, 40 percent fewer than a year earlier. At the same time, just over 5,200 people in the software, IT services, and telecommunications sectors were affected by layoff notices during the period from August 2025 to July 2026.
The number of job seekers in certain IT professions has also increased, but this trend follows several years of very strong employment growth. Despite the decline in hiring, demand for tech skills remains significant, and the tech industry still has many job openings relative to the number of people employed. At the same time, the industry is undergoing rapid transformation, with AI changing both work methods and the skills in demand.
“Companies are still holding back on hiring. At the same time, AI and rapid technological advancements are changing the demand for skills. This makes initiatives—such as making it easier for employers to hire, as well as those focused on skills development, reskilling, and better job-skill matching—particularly urgent,” says Christina Ramm-Ericson.
Positive signs, but competitiveness must be strengthened
Several other indicators paint a brighter picture. Financing conditions have improved, and over the past 12 months, approximately 8,200 new tech companies were launched—32 percent more than the previous year.
– The recovery is welcome, but Sweden is emerging from several years of economic weakness at the same time that global competition for investment, talent, and the jobs of the future is intensifying. Now we need to boost productivity and the competitiveness of our businesses. This is not the right time for proposals that reduce available working hours or increase business costs, such as shorter work weeks and the elimination of the sick pay deduction,” says Christina Ramm-Ericson.
To strengthen the recovery, better and more long-term conditions are needed for tech companies.
“The growth of tech companies is of great importance to Sweden’s economy as a whole. In an uncertain world, digitalization, AI, and other strategic technologies are becoming increasingly important for Sweden’s competitiveness, security, and well-being. The government that takes office after the election needs to quickly establish long-term rules and implement reforms that lead to more investment, growing companies, and new jobs,” says Christina Ramm-Ericson.