Plunging Salaries

By Lisa Vaas  |  Posted 2002-10-25 Print this article Print

For those IT workers still employed, salaries are plunging. The report found that IT compensation in the United States is down, on average, $3,000 to $10,000, depending on the position. In spite of the fact that IT headcount has been shaved down so far, Rubin predicts that we still havent hit bottom when it comes to layoffs. "Over the next year or two there will be layoffs totaling in the hundreds of thousands in the IT field, as people are again pressured with budget concerns," he said. "It wouldnt be surprising to see a quarter of a million technology jobs get laid off next year. We see budget pressures on organizations up to 20 percent. Companies tend to take half of that out of the workforce."
One thing that might offset permanent job loss is a move to outsourcing. "The trick is, you may cut people, which causes risk to the business and delivery, but you may end up going to systems integrators and outsourcing firms," Rubin said. "You can lay off your own people and get a contract with a provider to do the work, and you dont have to hire more people to do the work, and pay them salaries and benefits."
And because the IT workforce is glutted with talent, those outsourcers are fetching far lower salaries. Firms that were charging $110 to $150/hour three years ago are now getting $50 to $55/hour for the same work. And as U.S. salaries creep down, the move to ship IT work offshore may begin to ebb, as the gap between U.S. and non-U.S. salaries shrinks, Rubin pointed out. But thats feeble consolation when compared with the fact that headcounts and salaries are still getting pummeled. With the situation so dire, its no surprise that Metas respondents, when asked if theyve considered leaving IT due to the current job market, overwhelmingly—to the tune of 62 percent—said yes.

Lisa Vaas is News Editor/Operations for and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

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