2009 a Big Year for Tech Layoffs, but 2010 Looks Better

Ann All

We knew 2009 was an ugly year for tech employment, thanks to rounds of layoffs at many employers. The list of those cutting jobs was a real tech Who's Who: Microsoft, IBM, Adobe, Yahoo, AOL, AT&T, Sprint, Cisco Systems, Nokia, Seagate, Sun. Even Google made cuts in its sales and marketing and recruiting forces.

 

But now we know just how ugly, and the numbers are pretty staggering. According to outplacement company Challenger, Gray & Christmas, the technology sector announced 174,629 planned job cuts in 2009. That's 12.3 percent higher than the 155,570 job cuts announced in 2008 and the biggest year-end total since 2005, when tech employers eliminated 174,744 jobs.

 

Electronics companies took the hardest hit, losing 65,300 jobs in 2009, a 55 percent increase from the 42,062 job cuts announced in 2008. Layoffs at computer companies were pretty flat, with 65,261 cuts in 2009 vs. 64,860 in 2008. Telecommunications companies actually cut 9.4 percent fewer jobs, 44,068 in 2009 vs. 48,648 in 2008.

 

Many of the layoffs, 84,217 jobs, occurred in the first quarter. While 118,108 jobs were eliminated between January and June, job cuts in the second half of the year fell to "just" 56,521, a 52 percent drop. And that points to a recovery -- albeit a slow one -- in 2010, said John Challenger, CEO of Challenger, Gray & Christmas. He said:

... It's going to be a slow climb out of this recession, but computer and electronics firms should be among the first to see the turnaround, as companies try to postpone hiring by achieving productivity gains through technology.

So while technology vendors will begin benefiting from a rebounding economy, other companies will likely try to eke more work out of their existing staffs. When companies do start hiring,IT pros increasingly will be expected to manage people and processes along with technology.

 


More "blue collar" IT jobs, including programming and operations work, will be automated and/or offshored, predicts Gartner. IT organizations in midsize and large companies will be at least 30 percent smaller in 2010 than they were in 2005, Gartner believes. Challenger may have been alluding to this when he said "many employers are very particular about what skills and experience they want new workers to have."

 

Despite this, CareerBuilder's annual hiring forecast found 32 percent of IT employers plan to increase the number of full-time, permanent employees in 2010, the highest level of planned hiring of any industry surveyed.

 

Like other industry observers, Challenger, Gray & Christmas predicts a move to electronic health care records will benefit tech hiring. A Robert Half Technology survey administered in Q3 2009 indicated health care organizations planned to increase hiring by 5 percent in the fourth quarter, while overall IT hiring would remain flat. An IT practice manager for IT outsourcing and staffing firm Hudson referred to electronic health records as "health care's Sarbanes-Oxley."



Add Comment      Leave a comment on this blog post
Jan 25, 2010 9:32 AM Graham Perry Graham Perry  says:

At odds with Ann's article is a recent Gartner report that states organisations are holding onto their IT staff as they want the skills in place in readiness for the upturn.

Not sure how true this was in 2009.

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