Health

Tech layoffs in 2009 hit a 4-year high

A recent report says tech job losses in 2009 were at their highest in four years.

Some disheartening, yet not surprising, news from a recently released report by outplacement firm Challenger, Gray & Christmas, Inc.:

  • Tech sector employers announced 174,629 job cuts in 2009, the highest total since 2005.
  • The total tech cuts comprised 13.2% of the 1.3 millions jobs lost across all industries in 2009.

Most of the tech cuts happened in the first quarter of 2009, with more than 84,000 layoffs. More than 65,000 job cuts were announced on Jan. 30 alone, and included Sprint Nextel (S, Fortune 500) and Texas Instruments (TXN, Fortune 500). But by the fourth quarter, tech cuts tapered to just under 34,000. The report says the rapid decline in cuts over the year could signal a 2010 turnaround.

It's not surprising that during downtimes, with most companies focusing on how to keep their heads above the water, innovation is the first thing to go. Companies just don't have the money for tech spending. But the folks at Challenger say it might mean that when the economy starts turning around, 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."

The report says that companies that use electronic health records should be hiring IT pros to make their systems fully functional.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

21 comments
Professor8
Professor8

Companies that abuse electronic health records should be hiring unethical IT pros.

TechMitch
TechMitch

Corporte America is ruined by fabulously smart people like Bill Gates who want to make immigration to the US of A EASIER. A guy who got rich off of America and then has the nerve to offshore everything.....so sad. Wait we have no IT staff oh gee my laptop isn't working.......Hey Wait! Call that guy working for a 3rd party staffing agency who makes 10 to 20 bucks an hour to come in and fix it for me! Oh wait that guy has no car anymore cause: He couldn't make his loan payments due to the 10 hours a week pay he was making....

Englebert
Englebert

Reality hits home. Many years ago I read of concerns that there wont be enough personnel to deal with the demands of the tech sector. Automation, automation everywhere and not enough techies to help... Well, what a turnaround. This conundrum has been resolved. Tech jobs are the easiest occupation to offshore Lesson for budding students : STAY THE HECK OUT OF TECH

reisen55
reisen55

Because of OUTSOURCING. India is still THE PLACE TO BE if you want a technical career at a low low wage. American IT workers be damned.

Fregeus
Fregeus

It is a good picture of our industry in our times. The part I have some issue with is: It's not surprising that during downtimes, with most companies focusing on how to keep their heads above the water, innovation is the first thing to go. This has not been my experience. I have no problem with companies laying off personel to "stay above water" I have a problem with companies laying off personel to "remain in their long chairs sipping dakiris under the umbrella". I saw a lot of companies laying off personel to "keep their profit margins high" and that, to me, is not staying above water, its trying not to get wet during the storm. I also believe that, one of the main reason for this, is the fact that most companies find that salaries in North America, for IT specialists, is too high. But the fact that we need to be on the cutting edge of tech, have experience, and that we could be let go on a whim, increases dramatically the salary demands of IT personel. Its expensive to keep up with those criterias. When I came into IT, I could count on following one course per year and time to learn and study while I work. Now, every minute of your time has to be "productive" to the company, so no more learning on the job. I have to pay for my own training and take it while I'm on my vacation time. And I have to keep up with the technology trends in order not to lose my edge. That costs money. If the companies don't pay for it themselves, they will pay for it in higher salaries or consulting fees. That makes us less competitive with the outsourcer counties out there. And above all that, they have the gall to tell us that there is a decline in IT enrollment in schools. WELL DUH!!! TCB Edited for typos

TheProfessorDan
TheProfessorDan

I think if we take anything from this article is that if you are working right now, be thankful and don't give you employer a reason to down size us. I always amazed at how much people with jobs complain about work. I understand that it is human nature but it still irks me.

maclovin
maclovin

Well written, Toni. I like the like that says "It?s not surprising that during downtimes, with most companies focusing on how to keep their heads above the water, innovation is the first thing to go." That couldn't be more true. IT is still seen as a cost-center, and most management types don't understand the need for it. So, if they think everything is working fine, why not let some people go and double up the responsibilities on someone else! When it comes to health systems, they need to hire people that know how to SECURE their systems more than anything else. If the focus is on security, then a normal upgrade into the 21st century of computing is IMPLIED. Many places still run on programs that re DOS-based!! With HIPAA requirements getting more stringent, things will need to change there, especially! THen again, that's just my opinion, I could be wrong. (Thank you Dennis Miller)

jkameleon
jkameleon

The whole malware industry thrives on IT talent glut.

Professor8
Professor8

I put the blame on the changeover in executives, and the teachings of the B-schools. The enrollments exploded in the 1980s, and the quality (already low), took a dive. Throw in the usual fads (common amongst both the educationist schools and B-schools), fanned by the "management consultants", and the disaster is not all that difficult to understand.

jkameleon
jkameleon

It gets loudest about a year before recession and layoffs. When tech company starts getting into trouble for one reason or another, management needs some sort of excuse. Talent shortage works best: "I could arrange as many deals as necessary, but unfortunately, I can't find enough skilled people to carry them out, so I simply don't dare to sign any contract. Today's youth just isn't interested in tech, government should do something about it."

phil.beach
phil.beach

I've been involved with companies that off-shore IT work since before the Y2K. What most managers and technical guru's are learning is you get what you pay for. DUH! There are numerous obstacles that make working with off-shore professional difficult. Most obstacles like time zones and language barriers can be overcome with patience and a strong desire to use cut rate consultants. What cannot be over come easily is the fact most of the work I've seen come from off-shore in the last 10 years is sub-standard. We would have been better off hiring a recent college grad or co-op at low rates. At least then we'd have a sense of control over the development processes a little more and could over see the quality of the products before they land on a customer site. Poor quality and shoddy work is what I've experienced, combined with the other obstacles; I would never recommend a client of mine to use off-shore IT workers. The sad truth is some companies and managers miss the you get what you pay for lesson and continue to look for cheap alternatives. I view Indian IT firms like the extreme techno geek here in the US. Hide them from the customers (no interaction whatsoever) and you'd better have really good, complete, and detailed design specifications. Like the techno geek, Indians are not as strong (lousy) in understanding business processes and user requirements. BUY USA!

lcave
lcave

I say we either pay the offshore people more (no way) or bring support back in the us. The offshore support is horrible. I had to download software drivers for a hardware problem before HP would send the part. I nearly lost a critical server because HP is saving...WHAT? Out of the many, many offshore support techs, maybe one out of 100, has a clue. Try to escalate, and you either get hung up on or an argument. I could and may write a book about the horror and my personal frustration with offshore support. KEEP UP THE GOOD WORK CORPORATE AMERICA!

Professor8
Professor8

"most [executives whine] that salaries in North America, for IT specialists, is too high. But the fact that we need to be on the cutting edge of tech, have experience, and that we could be let go on a whim, increases dramatically the salary [requirements] of IT personel... When I came into IT, I could count on following one course per year and time to learn and study while I work. Now, every minute of your time has to be 'productive' to the company, so no more learning on the job. I have to pay for my own training and take it while I'm on my vacation time. And I have to keep up with the technology trends in order not to lose my edge. That costs money. If the companies don't pay for it themselves, they will pay for it in higher salaries or consulting fees. That makes us less competitive with the [body shoppers]." Yep, software product and hardware firms used to relocate workers, and planned on investing in 2-6 weeks (60-300 hours) of education/training per year for each employee, plus reimburse the costs of books. Not to mention the many who were company heroes, presenting papers at conferences, urged to recruit their friends, etc., one week, and dumped the next, when they reached the ripe old age of 35 and were told to do a total knowledge transfer to their body shop replacements.

LarryBoy2
LarryBoy2

I couldn't agree with you more, TCB. I and many of my coworkers were victims of one of those companies last year. The layoffs had little really to do with the company "keeping it's head above water." For most of us, it was almost a relief. The morale at said employer had degraded hugely over the previous several years.

moore-margaret
moore-margaret

When you're being verbally or mentally abused, there is good reason to complain about your job. No amount of money is worth the grief that some people most go through on a daily basis in order to keep their jobs...

jck
jck

First they whine that government should help, but then when government wants to take control to do something about it the companies whine. Just another example of how companies want another handout of something without losing anything in the process.

Professor8
Professor8

Yep, the body shop moved in and you were declared excess amidst the turrrrible talent shortage. It's interesting that a certain Germany firms took over one of the tech firms in Milford... the same one that dumped their US citizen tech workers in Lake Mary, Florida a few years back. The Ohio and Clermont county governments rolled out the gold carpet, handing the body shoppers some $19M in "incentives" to set up shop on the promise that they'd hire 1K local natives. After nearly 2 years they've hired about 300 people, but no word on their nationalities. And now you're telling us of local tech firms dumping people. Strange that we didn't see that prominently reported by Gannett/CinciEnquirer as well as the tech press.

rbogar
rbogar

While many companies are cutting salary and benefit costs because they have to, I find just as many, particularly in the otherwise thriving health care fields, simply because they know they can.

TheProfessorDan
TheProfessorDan

If you are being verbally or mentally abused, no amount of money or security is worht that. I just think that some people complain about stuff that is less severe than what you are talking about.

jkameleon
jkameleon

Google about Harris Miller and his "Critical shortage of programmers" PR campaign in 1998 and 1999, just before Dotcom bust. It's probably the most notable example. And it's not just the USA, and it's not just IT. I've noticed similar phenomena in the 1980s where I live. There was a huge hulabaloo about the critical shortage of precision mechanics, like "Oh dear, youth doesn't want to learn precision mechanics anymore! Who will maintain our typewriters, cash registers, card punchers, teletypes etc? Technical progress will grind to a halt, and our civilization will come to an end! Government must urgently enrapture youth for precision mechanics." http://www.mechantiques.com/_2007old/photos/PremierCash1.jpg http://www-03.ibm.com/ibm/history/exhibits/vintage/images/4506VV4002.jpg http://www.officemuseum.com/Teletype_Model_15_front.jpg The outcome was as usual: Multitudes of unemployed precision mechanics a couple of years later.