VIETNAM NATIONAL UNIVERSITY

UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES

FINAL ASSIGNMENT
MICROECONOMICS AND MACROECONOMICS
CASE NUMBER 1

Module Code: ENG2046*** 1

Lecturer: Th.s Nguyễn Thanh Thủy
Date of submission: 18th March, 2023

GROUP NUMBER 4

Student’s name Student’s ID Phone Number Email

Bùi Thị Hạnh 21041010 0346939923 buihanh16092003

@gmail.com

Trương Thúy Hoa 21040860 0336241258 thuyhoavls@gmai

l.com

Nguyễn Minh Ngọc 21040918 0813682332 ngoc06122003@g

mail.com

Nguyễn Thái 21040942 0919337486 thaithanh307@gm

Thanh ail.com

Hanoi, 2023
 I. Introduction
Today, IT (standing for Information Technology) has become dramatically
developed and evaluated as the most potentially lucrative economic sector in general.
The manifestation leading to this evaluation is that companies specializing in IT often
bring in billions of dollars in annual revenue, in which employee remuneration tends
to be higher than in many other industries. With the vigorous speed at which the
economy improves, there would be more opportunities for university students,
especially those from prestigious universities or institutes. However, until 2022, a
wave of layoffs has emerged, beginning with the announcement from Meta to
terminally stop recruitment. Even the interns studying at the Massachusetts Institute of
Technology (MIT) could not avoid this wave. More remarkably, approximately 13%
of apprentices and full-time employees are made redundant. Parallelly, according to
The New York Times, international corporation Amazon has also considered
dismissing half of its apprentices after employing 18.000 people in 2022. Moving
back to the Asian IT companies, in India, EdTech Unacademy had cut staff three times
in 2022 with the number of employees being laid off reaching 1,500. Facing this
wave, almost all university students majoring in IT have been under pressure with the
fear of unemployment. Nevertheless, notwithstanding the process of dismissing, the
IT sector still requires a large number of employees. According to data from
CompTIA Group's January 2022 technology jobs report, despite a slight decrease in
job postings in the industry, the number of vacancies remained similar to the same
period in 2018.
This paradox has put numerous questions on the causes of this phenomenon
and whether there is any influence on the development of the IT sector in Vietnam. If
yes, what is it, how does it affect IT students in Vietnam, and what can be the solution
to address this issue? In this report, the authors will thoroughly discuss the status quo
of this phenomenon in Vietnam and propose some solutions to address the issue.

II. Theoretical background

1. Definition of unemployment
Unemployed people are those who are not employed, are available for work, and try to
find employment during the previous four weeks. They are also people who are
waiting to be recalled to a job in which they have been laid off.
Formula to calculate the unemployment rate (UR):
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑢𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑
UR=
𝐿𝑎𝑏𝑜𝑢𝑟 𝑓𝑜𝑟𝑐𝑒
x 100

2. Types of unemployment
Economists often break down unemployment into three types: frictional, structural,
and cyclical.
a, Frictional unemployment: Unemployment that results because it takes time for
workers to search for the jobs that best suit their tastes and skills.
b, Structural unemployment: Unemployment that results because the number of jobs
available in some labor markets is insufficient to provide a job for everyone who
wants one.
c, Cyclical unemployment: Unemployment that results because the economy
experiences a decrease in the demand for goods and services.

3. Situation in Vietnam after the mass layoffs in the world.

According to the General Statistics Office of Vietnam, in the first quarter of 2023, the
Labor Force Participation Rate in Vietnam remained at 68.90 %, unchanged from the
fourth quarter of 2022. The number of Employed Persons is 51.1 million people, the
number of Unemployed Persons is 1.05 million people, as a result, the Unemployment
Rate is 2.25 %.

As for the IT industry, although there are no mass layoffs in the Vietnam job market,
every year, the IT labor market will have relatively 55,000 new graduates from
universities specializing in this field. Nevertheless, according to the report of TopDev,
the total number of programmers in Vietnam (as of the first quarter of 2021) is
430,000, while Vietnam requires 450,000 IT human resources. That means there
would be approximately 20.000 vacant positions in the near future. Through this
above statistics, it is evident that there are a large number of unemployed people in the
IT sector, especially in the group of new graduates in Vietnam.
III. Case analysis
1. Causes
According to the report of the Ministry of Information and Communications of
Vietnam, about 1.2 million personnel in Information Technology (IT) was needed in
2020, with a shortage of more than 500,000 people. In the 4.0 era, the opportunity for
IT students should be much wider than other sectors. However, the reality is that the
number of unemployed programmers has been on the increase every year. The reasons
behind this are numerous, but this study will focus on 2 major ones.
a. Causes lying in the human resources:
- Low capability of the human resources:
Vietnam's economy has been making strides in applying advanced scientific and
technological achievements in the world, thus requiring a labor force with high
professional qualifications and skilled craftsmanship.
The number of new IT graduates is high, but it has not yet met the requirements and
quality of employers. Statistics from the IT Strategy Institute show that only 15% of
graduates meet the business requirements. More than 80% of the programmers have to
retrain, and some companies have to spend up to 2 years to retrain them.
The existing training program is inadequate in terms of both quantity and quality.
College and university education continues to account for a large proportion.
Furthermore, the current teaching approach is still conventional for the most part and
has not yet included the latest technological advances in use. There is a shortage of
practical programs in curriculum development work, which leads to a lack of
possibilities for students to apply the knowledge obtained in school to specific societal
problems.
- Good professional knowledge but poor soft skills and foreign language proficiency:
Students usually mistakenly believe that with the rapid development of the
industry and the shortage of personnel in enterprises, they can find a job according to
their wishes without having to improve their soft skills and foreign language skills.
Basic skills such as communication skills, team working skills, problem-solving skills,
and proactivity in work are essential not only for an IT professional but also for those
of any profession.
Besides, when they do not put much effort into enhancing their foreign
language, they would not be able to research documents or understand technical issues
and statistics written in other languages, which will be a substantial barrier to
acquiring knowledge and grasping more career opportunities.
- Lack of hands-on experience:
Many IT companies' opinions suggest that there exists a gap between the
training at universities and colleges, even vocational schools, and the actual needs of
IT personnel in businesses. The number of graduates entering the workforce is only
about 30%, with the rest needing additional training. Statistics from the IT Strategic
Institute in 2021 show that currently, 72% of programming students have no practical
experience, 42% lack teamwork skills, and 90% have little knowledge of the fields
they are working in.
b. Impacts of Covid-19 Pandemic
As of June 2020, there were 30.8 million persons aged 15 and over in the
country negatively affected by the COVID-19, including those who had lost their jobs,
had to be laid off/to take work off in turn, had to reduce their work hours, and had
income reduction, etc. The second quarter of 2020 marked a decline of more than 2
million people in the labor force – an unprecedented decrease over the past decade.
In the second quarter of 2020, the epidemic spread widely and fast through many
countries of which are Vietnam's leading commercial partners such as China, Korea,
Japan, the USA and Europe. This broke material supply chains and negatively affected
consuming markets, which seriously affects manufacturing and trading of enterprises.
As a result, enterprises had to conduct unpaid leaves, layoffs, decline their staff’s
working hours and wages, which speeded up the unemployment rate.
Regarding the Tech industry, Covid has had a large impact on the sector, as it
has reduced direct interaction between tech companies and their customers by pushing
for the use of technology to replace direct transactions. This has reduced the amount
of jobs available at tech companies, especially those involving customer-facing roles,
which therefore has caused an increase in unemployment within the tech industry.
 2. Solutions to overcome the difficulties
a. For students:
- Practice using English:
Learners must be fluent in English to become professional IT engineers and
land a decent career in the IT industry, especially if they wish to work with
multinational businesses. Not only will it provide respectable jobs in the future, but
English will also be the key for technology students to have access to the world's most
up-to-date specialist information.
- Be more proactive in their learning:
Technology students should concentrate on learning to do rather than merely
learning to obtain a degree. They must also increase their self-study time. Because
technological knowledge advances on a daily basis, self-study to improve oneself is
what decides the future success of IT engineers. An engineer, no matter how
competent, will become outdated if their sources of information are not updated.
- Define more specifically future jobs:
To do this, first of all, they need to research to choose a major that not only is
suitable for their abilities and interests but also has potential in the job market. It stems
from the fact that IT specialties are diverse, and the growth potential of each field is
different. Recently, the Ministry of Education and Training has released a list of 12
university-level training majors with great demand for human resources, including
Computer and IT. Accordingly, the field of Computing comprises six branches:
Computer Science, Computer Networks and Data Communication, Software
Engineering, Information Systems, Computer Engineering, and Computer Engineering
Technology; The IT industry group consists of two branches: IT and Information
Assurance. After determining the specific industry to which they want to participate to
devote their labors, students can have better preparation in terms of both knowledge
and skills related to their industries.
b. For universities:
 It is necessary for universities to design curricula that are relevant to reality,
and teaching theories should be combined with practice. In addition, domestic
universities may consider providing transnational study programs so that students can
have the chance to hone foreign languages and have internships in foreign companies.
The universities themselves also need to make efforts to link up with companies and
businesses to increase internship opportunities for students; hence students have more
opportunities to hone their experience and job-specific skills. Furthermore,
universities should include in their curricula the training of students in soft skills such
as teamwork skills, communication skills, presentation skills, and patience skills.

IV. Summary
This report will discuss the status quo of the unemployment phenomenon in the
tech industry in Vietnam and propose solutions to address the issue. One of the most
important causes leading to unemployment in the tech industry are new IT graduates
unable to meet the business requirements, either because students lack soft skills,
language skills and hands-on experience or because the existing training program
provides inadequate practical programs in curriculum development work.
Furthermore, high job turnover and a lack of commitment from employers lead to
instability in work and limited potential for advancement and success. The final cause
is the mass layoffs during the COVID-19 pandemic quarantine. Some solutions are
recommended to address these problems. Students must be fluent in English, be more
proactive in learning and strive to stay up-to-date. They must also research properly to
choose a suitable major that has potential in the job market. Additionally, Universities
should design curricula relevant to reality, provide transnational education programs,
and link up with companies and businesses to increase internship opportunities.
Training for soft skills such as teamwork, communication, presentation, and patience
should also be included.
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