Translation and Language Industry Observations

by David Grunwald

The R-word is being mentioned a lot in recent weeks. Are we already in recession? Are we out of the recession? Are we going to be in recession? There are many opinions but no clear-cut answer.

Amazon founder Jeff Bezos had some interesting things to say about the current state of the world economy. Bezos urges individuals and small business owners to delay spending until things settle down. I find this particularly fascinating because Bezos seems to be shooting himself in the foot. As the world’s second largest retailer, Amazon will be one of the hardest hit companies if people heed to Bezos’ advice. I give Bezos a lot of credit for thinking and speaking up on behalf of the little guy.

Hope for the best, but prepare for the worst (Jeff Bezos)

What about the translation industry? Are companies cutting back on translation budgets? Are translation companies and language professionals feeling the crunch?

Translation in Big Tech

Translation companies that are heavily reliant on some of the big tech companies may be experiencing a recession. After all, many of the big tech companies have fired thousands of people and suspended the work of outside suppliers like LSPs. These companies include Twitter, Facebook and Amazon itself. At Twitter, scores of localization managers were fired. The head of Twitter France resigned and the office in Japan was almost entirely dismantled.

Mr. Musk also issued an order to slow or in some cases halt transfers of funds to Twitter’s vendors and contract services (NY Times)

Other big techs like Google and Apple have not scaled back their work force-yet. Expect that to change if revenues slow down. Additionally, pressure from stock holders can lead to mass layoffs as cost-cutting tends to drive stock prices up.

Which industries are recession-proof?

Small to medium-sized translation companies are usually niche-oriented. Each translation company has its own areas of specialty. The large LSPs, like Transperfect and RWS, are active in every area.

If you are a small to medium-sized and cater to an industry sector that is in recession, then you will suffer as well. If you cater to a recession-proof industry segment, then you will not feel the shocks of a global slowdown.

Let’s take a look at some of these segments:

Luxury Fashion

Translation companies that work for the likes of Rolex, Vuitton and other high-end fashion brands may experience a growth in demand for translation work.

Demand for luxury goods remains resilient in the face of sharp inflation. Affluent consumers have been less affected by the higher cost of living while the average consumer has cut back on discretionary spending.

Third-quarter revenue at the owner of Louis Vuitton and Dior amounted to 19.76 billion euros ($20.29 billion), reflecting organic growth (excluding acquisitions) of 19% from a year earlier. (The Street)


If you are working for military contractors or are working directly for government contracts, you should be OK. Government spending is not affected by recession and the contracts are usually long term. Of course, all that could change in a Presidential election year should the new administration cut back on spending. But in the near term this segment will be recession-proof.

Medical Translation

This is another industry which is relatively recession-proof. Healthcare companies will continue to expand as the senior population grows. Pharmaceutical companies will continue to come out with new drugs, new clinical studies. Medical device companies will continue to introduce their products in international markets that require translation of materials.

Legal Translation

Another translation industry vertical which may not only not suffer, but may grow larger. When economic times are bad, companies may find themselves engaged in more litigation activity.

Automotive Translation

This segment is not recession proof. In recession, people buy fewer cars. Which means less translation work.

Social Media

Certainly not recession proof. As mentioned, social medical companies were the first to engage in mass layoffs.

Translation Software Tools

Companies that develop software for the translation industry, like MT systems, CAT tools and TMS software, will see a drop in demand for these products. Less work for LSPs and translators means less budget for translation software tools.

What is this going to do to translation prices?

Layoffs in the translation industry and shrinking LSP revenues mean more competition in the sector. This should inevitably lead to lower prices for translation services.

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