Will Technology Job Losses Be Worse than 2001?

By Donald Sears  |  Posted 2008-12-01 Print this article Print

It will not because there has not been a large quantities of technology hiring as there were during the Internet bubble buildup in the late 1990s, according to what Tom Silver, the CMO of the technology jobs' website Dice told CIO.com.

Given that U.S. government data came out today that now shows the recession began a year ago in December of 2007, it seems a little premature to be calling the game when we have not finished 2008 (as much as we'd all love it to be over). Evidently, there are some key indicators that you cannot see when a recession is going on, one of which is that "gross domestic product remained positive until the third quarter this year," according to a Reuters article from today.

Silver told CIO.com that job postings for technology jobs are down across the board about 20 percent, but are particularly bad in regions you'd expect like Silicon Valley. Here are some of the specifics from the CIO.com article including Dice's numbers about technology-heavy regions of the U.S.:

[Silver] says that the number of IT jobs advertised on his site had been holding steady at between 85,000 and 90,000 jobs until the September-October time frame, when the number of ads for IT jobs dipped significantly. "We've seen a drop of roughly 20 percent versus where we were last year," he says. "We're now around 70,000 jobs on the site."

The big markets for tech jobs--NYC, Silicon Valley, Chicago and Dallas--are experiencing the most significant declines in IT job opportunities, says Silver. Job opportunities are down 30 percent in Silicon Valley year over year, 25 percent in New York, 24 percent in Dallas and 21 percent in Chicago, according to Dice.com's data.

Given the information I've seen over the last few weeks with IDC cutting its forecasts for nearly everything technology related (in tech services and tech infrastructure), to research Ed Cone of CIO Insight pointed out recently showing corporate IT spending to be a "historic collapse," the economic data on the technology sector is not good, but as Dice's Silver pointed out (with little consolation to those affected), it's better than other industries.

Researcher Paul Carton of ChangeWave sums it up like this in his post on the spending collapse (make sure to look at his charts for the wider historic view):

U.S. corporate IT spending is in the midst of a huge nose-dive, the likes of which hasn't been seen before in a ChangeWave survey dating back to 2001. In short, the current ChangeWave survey findings virtually guarantee that we'll be seeing the technology sector get hammered with pre-announcements before the January earnings season gets underway.

I want to believe that 2009 will not be the bubble-bursting of 2001, but I have a feeling, much like Eric Lundquist of CIO Insight, that a big portion of work in technology over the near future will be for systems integrators, contract project management and other programming and business analyst skills that can be outsourced (and not necessarily offshored) using existing or low-cost infrastructure. As Lundquist points out, the CTOs and CIOS of companies he is talking to are dealing with internal customer and financial data issues. These guys need as close to real time numbers for budgets that they can get, and are looking for easier ways to make data consistent, and they need it--like now.

Don't we all.

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