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Monday, August 04, 2008 1:58 PM/EST

Report: Layoffs Way Up; IT Layoffs Hard to Gauge

It's not clear from outplacement giant Challenger, Gray & Christmas' latest job cuts report where IT exactly stands, but the numbers that it is giving across most industries suggest a fair amount of people at the beach for the remainder of the summer months, as inflation is on the rise.

Sorry to report what is definitively bad news, but let's be clear about something: This report doesn't give IT its own category, so take the data for what it's worth. According to the report, July is the second month this year where job cuts in the United States were over 100,000 (103,312 to be exact). Here's some of the pertinent data from the report:

The July figure is the second largest of the year, behind the 103,522 planned job cuts announced in May. It marked a 141 percent increase from July 2007, when employers announced job cuts totaling 42,897. Employers have now announced 579,260 job cuts this year, which is 33 percent more than the 436,396 job cuts announced through July a year ago. The pace of job cutting over the last four months is significantly higher than the first quarter of the year, when job cuts averaged 66,885 per month. Since April 1, monthly job cuts have averaged 94,651, a 42 percent increase.

The pace, while not specific to IT, is difficult to ignore. We could be seeing numbers like those of the post-Internet-bubble era (in 2001, for example, there were nearly 2 million layoffs). The bulk of these numbers is made up by workers in the transportation, financial and retail sectors, where turbulence has been a dominant theme, and it has been a truly difficult time for many afflicted by the economic downturn. This snapshot from the report lays out the specific industries:

JOB CUTS BY INDUSTRY JULY

Transportation 17,051
Financial 15,517
Retail 12,160
Automotive 11,631
Entertainment/Leisure 10,893
Health Care/Products 6,218
Government/Nonprofit 5,168
Consumer Products 4,420
Food 3,384
Electronics 2,585
Computer 2,524
Aerospace/Defense 2,208
Media 2,168
Services 1,722
Industrial Goods 1,629
Construction 1,378
Pharmaceutical 1,048
Telecommunications 995
Real Estate 264
Insurance 141
Commodities 125
Chemical 83

TOTAL 103,312

IT could be touching almost all of these industries. If the airlines, investment firms and Starbucks of the world are struggling lately, then it might follow that workers in high-paying IT jobs could be getting pink slips. And yet, critical system functions that at their core help the business make money need people to maintain, upgrade, design and build newer core systems. When you look beyond much of the sector-specific data, cost-cutting happens in every organization, especially if your company is public and answers to shareholders with growth expectations regardless of economic cycles.

And in related news, Gartner recently reported that IT salary increases are holding steady, but staffing is a little down. From the Gartner report: "According to a survey of 285 U.S.-based IT organizations, 57.9 percent projected an increase in IT staff levels ... during the survey time period (March 1, 2008 through February 28, 2009). However, this is a notable drop from 66.3 percent reported in the 2007 study."

How much of an increase, as in how many jobs, isn't abundantly clear. What's it really like out there for you this summer in your technology job?


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Comments (13)

What's it like to be on the beach this summer? Until June 13 I was working at Morgan Stanley as a salaried consultant with benefits. Then development projects were eliminated and so were the several thousand employees and consultants doing the work. So if your projects are gone, who cares if you sacrifice employees? In today's financial and IT climates, employees are facial tissue: blow your nose in them and throw them out.

Currently I am a deli clerk in a supermarket; my only benefit is grabbing excess meat that adheres to the slicer. I'm 64. My career has vanished and my primary hope is to get to 65 so I can collect Medicare.

durond :

Here in Austin, the tech market is consistently volatile. Over the last ten years we've seen increasing population growth, tax increases and property value increases, with little cost-of-living increases. Dell continues it's save-by-attrition cost-cutting layoffs, and it even closed the last fabrication plant here. The market is glutted. Everybody and his dog knows how to build a website and tech support is almost minimum wage, starting at $10 an hour. For this we went to college...

I am a .NET/MS SQL Server developer. I have been working with a publications company for 8 years as a Senior Systems Analyst. I started working as a contractor off and on for the first 4 years and was hired full time the last 4. The week before last the Exec. VP called to tell me it was my last day. They decided to outsource all the programming work. Being the only programmer that meant I was out of work. I am now beefing up my resume to position myself for a CIO position and at the same time working on my web site to try and make a steady income from my one-man business. I am constantly reading the Wall Street, tech journals, and business books to try and stay ahead of the curve. I get up around 5 AM and work until about 7 pm.

jr :

Can't complain about my salary, and still get a lot of calls for recruiters. But it wouldn't hurt to see more projects on-shore to keep the dollars in the USA.

tom :

Yeah, I have'nt been able to get back into the IT 'club' since the 2001 cutbacks...when I was pushed out! If your out of a job now, your damaged goods in the eyes of the HR wizards!...So these 'new' folks will just make it that much harder to resume my career!

Even Walmart is starting to fill up!

What amazes me is that all you so-called 'experts' still think the 2001 crowd actually have found 'real' jobs! I assure you the majority that were let go for whatever reason did not get re-employed in IT! Some yes, most no! The majority of jobs the past 7-8 years have gone to H1B's and L1s as corporations continue their dismantling of the US economy in the name of globalization and bigger perks and bonuses for themselves!

MBA, BBA, IT Director 14+ yrs experience...

Tom :

The real-estate and construction numbers are hardly accurate. I think most of us know someone in these fields that have left (by choice because there is no work) but are not counted, since they are independent contractors and not counted in the numbers. I suspect there are a lot of IT folks in the same boat. Not counted as lay offs because they are treated as contractors.

And the real numbers are?

W Mitchell :

Take a look a HP. They have been averaging over a thousand people per month since the first of the year just in the outsourcing group. And this month is supposed to be really bad. But it is also happening in other departments across HP. And the severance plans keep getting smaller. HP is making it's numbers thru layoffs, stringent travel restrictions, etc. A short term fix for a long term problem.

Greg :

From my perspective, things are great for IT workers.

Two months ago, my wife was offered a job in a different city. We decided we would move if I could find a job. I found one in two weeks.

I forgot to turn off my profile at the major online job sites. Last week I received an average of three calls A DAY from recruiters. I also receive five or six emails a day with job opportunities that match my skills.


Ernie :

This article follows others that DO NOT present the whole picture regarding the IT workforce. Please provide
1--Jobs Outsourced, 2--H-1B Visa holders working in IT, 3--Court case against HR specifically NOT hiring Americans, 4--IT layoffs at Microsoft, Intel, Cisco etc., 5--Use of Consultants versus full time FTE.

Although you have reported IT growth in the past, what positions are you referring to - do these positions pay enough to support 2 or more children.

All NEWs regarding the IT industry have been totally inaccurate since 2001-2002 when the jobs were cut due to Year 2000 expenses.

ErnieGs
Columbus, Ohio

Jeff L :

Crappy! Out of work, food high, gas high! We need new leadership.


Alex :

I'm a DBA for a lesser known RDBMS. So as I look for new employment I am needing to extend my search to "other possibilities". I have 22 years of experience in IT which means I am older and hopefully wiser, but also a slower target than those younger, stronger, and more willing or capable of demanding 7x24 support this industry requires.

I have applied unsuccessfully to 5 jobs in the last year. And unfortunately due to the new HR policies company's have adopted, I infrequently get feedback from anyone that let's me know they even reviewed my resume.

So as I take aim in the dark I wonder if the growing baby boomer's exiting IT will make more opportunities for me? Hopefully, I only have another 10 years to retirement so I won't be far behind.

Regards.

Just a thought :

How much of this is the direct or indirect result of rising Energy cost. Which has an impact across the board...

2008 Leadership :

A meaningful quotation on leadership in these political times comes from Ken Blanchard who said "In the past a leader was a boss. Today's leaders must be partners with their people.. they no longer can lead solely based on positional power." Important to remember.

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