A sudden and unexpected burst in private-sector downsizing pushed the number of announced job cuts to a 16-month high of 66,414 in July, according the latest report on downsizing activity released this week by outplacement consultancy Challenger, Gray & Christmas. Similarly depressing figures regarding the U.S. job market have made headlines for the past few months, but IT professionals can take comfort in some more encouraging news.
The July surge in job cuts was dominated by a flurry of large layoffs by a handful of private-sector employers, the report noted, including Merck, Borders, Cisco Systems, Lockheed Martin and Boston Scientific. The job cuts from these five companies alone accounted for 38,100, or 57 percent, of the July total. Despite the increase in job cuts last month, the pace of downsizing in 2011 remains slower than 2010, but it is quickly gaining ground. So far this year, employers have announced 312,220 cuts, 8 percent less than the 339,353 announced in the first seven months of 2010.
"The spate of job cuts should definitely raise some red flags, but it is important to keep the monthly job-cut total in perspective. Yes, this is the largest job-cut month in over a year, but the last year has seen some of the lowest monthly job-cut totals since the late 1990s," said John A. Challenger, CEO of Challenger, Gray & Christmas. "The 66,000 job cuts recorded last month are still well below the 105,000 job cuts per month averaged between January 2008 and December 2009."
Dice's August jobs report found the number of available IT jobs as of the first of the month stood at 81,498, down from July's report, which found 82,867 available IT jobs. Of the positions tallied in the report, 49,540 were full-time positions, 34,855 were contract positions and 1,578 were part-time positions. The New York/New Jersey metro area was the top region to find a job, with 9,378 jobs posted as of Aug. 1. That represents a 14 percent rise in available jobs in the region, compared with the same period last year.
In a recent interview, CompTIA president Todd Thibodeaux told Channel Insider that about 400,000 IT jobs are currently unfilled in the United States, with top markets such as New York and Silicon Valley unable to fill the job openings they have. While many of these positions are entry-level, certain skill sets are commanding premium pay such as cyber-security experts, mobility experts and systems integrators who can make one cloud application work well with another, he said.
However, SurePayroll's Small Business Scorecard for July 2011, an economic indicator that tracks the health of the U.S. small business economy, found small business hiring is down in 18 metro areas. For July 2011, both hiring and paycheck levels were down slightly from the previous month, resulting in year-to-date decreases of 2.4 percent and 0.3 percent, respectively.
In addition, optimism among small-business owners plummeted from 67 percent in June to 47 percent in July. For the last several months, Michael Alter, president and CEO of SurePayroll, has said the small-business economy is in neutral and teetering on the brink of improvement or downturn. Now, he believes "the economy is in reverse," adding that the turmoil surrounding the U.S. debt-ceiling debate certainly played a role.