Joel’s Market Pulse - Q4/2025

In this Q4/2025 market analysis, Joel Liukkonen analyses the IT services market’s past year.

Looking back at the year 2025, one could say that it hasn’t been a bounce back year for the IT service market in Finland that many were hoping for. Optimism and long awaited positive turn around shook off quite early in the year when publicly listed companies started to report their somewhat disappointing Q1 and Q2 results and change negotiations were announced one after another. What is then the status and expectations of the IT service market now and for the upcoming year?

Weak year for the IT Service market

Late 2024 and early 2025 many estimated that the IT service market has seen its rock bottom and the year 2025 would bring better news for IT companies and tech professionals. It feels like it has now been two years since people started saying that this half went poorly but we are expecting the next one to be better. Looking back at the year 2025, there was no bounce back and multiple IT service companies will likely shrink during the year which could be seen from publicly listed companies as well.

Based on Inderes, out of 10 publicly listed IT service companies seven are estimated to have negative organic growth during 2025, being between -1.2% and -18.7%. Out of 3 that have positive growth, the growth is estimated to be only between 1% and 2.7%, meaning that the average organic growth is estimated to be -4.2%. Overall the negative trend in revenue, considering these publicly listed companies’ average, has occurred since early 2024 for each quarter (Graph 1).

On the other hand, discussions with people working in the IT service companies reveal that there has been some positive signals during the second half of the year. While there are no statistics to back up these observations as Q4 reports haven’t been published yet, the overall feeling might be more positive after quite a difficult year. However, the big picture of 2025 is unlikely to change much despite possibly positive development and signals.

Other financial statistics like EBIT haven't been as poor but are still a mile away from the early 2020s “golden years”. The majority of publicly listed companies are likely to have positive EBIT ranging from 1.5% to 10.2%, only one of them possibly trailing to be negative. On average, Inderes estimates the EBIT to be 5.2%, highlighting that margins of the companies have remained relatively low. Tough competition and realised bench risks are given as the top explanation.

To fight bench risks and shrinking business, many IT Service companies have had change negotiations to lay off people during 2025. Notable thing is that from the publicly listed companies, Siili, Netum, Vincit and Gofore have had even two change negotiations throughout the year. However, Gofore communicated that the second one was related to acquiring Huld. Out of 10 publicly listed companies, only three have not had change negotiations this year. Meanwhile seven have of which four of them twice, highlighting the rough year for the professionals and companies.

Moreover, to underline the dramatic statistics of change negotiations and the difficult year, Reaktor announced its history’s first change negotiations in October. From other IT services companies or companies also providing IT services, Solita, Fujitsu Finland and Elisa have also had their own. Most of the companies are reasoning the actions by changes in the market, likely meaning both difficult market conditions and changes in customer needs like the rising focus on AI and data.

Tough market for the employees

For the IT professionals the situation has been difficult. Simultaneously, IT companies are reducing their headcount while the job market has remained poor. Furthermore, AI is evaluated to change the nature of the job market, possibly reducing the need for certain IT roles. Whether it will be the case or not, even the speculations might make companies more hesitant to hire in a short term and they are rather waiting to see if AI will reach its potential.

Like discussed in the Q2/2025 market pulse, the job market is extremely difficult for juniors and recent graduates. This might lead to unwanted experience gaps on a long term, especially when the market conditions get better and more workforce is needed once again. On the other hand, one could also state that younger professionals might surprise everyone with their capabilities by being the first real AI-native generation and beating more experienced colleagues in new technology adoption. However, the negative effects of the situation are likely to be more significant due to lack of gaining experience and opportunities. As they say experience brings confidence.

On the flip side of the coin, experienced freelancers have been able to do relatively well considering the difficult year. Certainly the situation differs by expertise a lot and there has been long “bench times” for many talents. Yet, based on Thriv statistics, the project durations have remained long (85 % over 12 months) and hourly prices have been relatively stable (on average 85 €) this year. This can be explained by the fact that companies want to hold on experienced talents while having flexibility in terms of contract model, like also discussed in the Q2/2025 market pulse.

Some positive signals

The difficult situation of the IT service market is mostly caused by the market conditions and especially due to lack of investments as companies are more keen on streamlining costs extensively which has also been discussed earlier this year.

As the last two years have certainly been misses in terms of growth for the IT market, and the beginning of this market pulse has highlighted the difficult situation faced this year by both professionals and companies, one could ask if there are any positive signals seen in the market.

AI investments and adoption

Despite lacking investment rates in the last two years, the investments in R&D and in software and databases have been increasing and the growth is estimated to continue for the upcoming years. Also, an interesting statistic is that Finland is investing in AI the second most in Europe when compared to GDP. Whereas the size of investments are not even close to the effort in the US or China, it highlights that companies are seeing AI as a way to enhance their operations and bring future growth.

Moreover, in a survey conducted by the European investment bank, Finnish companies have the highest share of AI adoption in Europe. Also, the same survey shows that companies investing in digitalisation and innovation are relatively high. The investments are seen in AI research as Finnish government and private investors funded together to establish Ellis institute in Finland to accelerate AI research and development. From the individual companies Nokia is aiming for AI infrastructure markets in Europe and also to become part of Nvidia’s ecosystem.

Potential risks

Whereas these are positive news in terms of investments that have been lacking lately, one could say that there are certain risks related to having too much focus on AI investments. Lately in the market there have been comments for example by Sam Altman and Sundar Pichai on how AI investments might be getting irrational, possibly creating a market bubble.

As being a valid risk, a realistic approach to protect from it could be by identifying that AI is not the only investment companies can make. If you are a company executive reading this market pulse there is one suggestion that we make, certainly invest in possibly game changing technologies such as AI, quantum computing, you name it. There are still many other areas which will benefit the companies when investing in them. One being your people.

What about 2026?

One might wonder if 2026 will finally be the bounce back year that everyone has been waiting for so long. Based on Inderes, the beginning of the year is estimated to be still quite difficult and the publicly listed companies would only have organic growth of 1% on average. They evaluate the competition to remain tough and public sector demand to remain relatively low. However, the positive drivers are the lower interest rates and trade contracts between Europe and the US.

On the other hand, lately there has been regulation schism between the US and Europe once again, now considering the big IT companies which could lead to negative effects in the market if serious actions are taken by either party. It’s worth following this development along with market fears about the potential AI bubble closely in 2026.

For the individuals, the job market can be estimated to show slightly positive signals, however, the required skills might be quite specific. Thus, it is not a bad idea to develop your skillset to be more versatile.

Lastly, it is unlikely that 2026 is going to be a huge bounce back year for the IT service market yet, it might finally turn the organic growth back to a positive track. However, positivity and positive news feed positivity, and honestly we are more than happy to be wrong if it ends up being one.