Despite layoffs caused by corporate mergers, the technology job space
remained relatively stable for September.
In the overall American economy, September job cuts were 33 percent lower
than a year ago — with 71,836 layoffs compared to 107,863, according to
analysis from Challenger, Gray & Christmas, a global outplacement firm
based in Chicago. With two consecutive months of lower job cuts, the
third quarter saw the lowest downsizing since the second quarter of 2004.
However, the tech industry took some tough hits because of corporate
”We have seen a pretty strong economy generally for merger and
acquisition activity,” says John Challenger, chief executive officer of
Challenger, Gray & Christmas. ”When you see that kind of consolidation,
you know that most companies don’t need duplicate headquarters, so
layoffs will follow.”
Challenger reports that more than one in seven job cuts announced this
year resulted from a merger.
Right now, the computer industry is showing more job cuts than in all of
2004. Challenger, Gray & Christmas reports that there have been 61,907
layoffs in the computer industry so far this year, compared to 48,917 in
all of 2004.
”It looked like layoffs were trending upwards, but in August and
September they took a breather,” explains Challenger. ”We’re still over
8 percent ahead of last year’s pace for the first nine months, but the
last two months have been relatively flat and benign. I think that
hopefully is a good sign. I’m a little concerned that it’s just a
breather and a wait-and-see. I do feel like the economy has been slowing
More Spending Means More Jobs
Scot Melland, president and CEO of Dice Inc., an online IT recruiting
company, says tech spending is picking up and that will influence the job
”Even with the higher oil prices and the hurricanes, tech spending still
has a lot of momentum and that’s reflected in the job market, as well,”
he says. ”There were some layoffs — PeopleSoft and Xerox — but we’re
still seeing a lot of new hiring. The one thing that continues to be
promising for tech professionals is you see the growth of full-time
positions is higher than the growth for consulting positions. Companies
are confident enough going forward that they’re bringing on people full
According to Dice’s numbers for September, the number of ‘contract’
positions being advertised on the job site was 31,310, compared to 50,603
for full-time positions.
Dice also shows:
the average salary of $87,100 for a contract position;
and Silicon Valley.
Melland also notes that he sees a good omen in the fact that there’s
growing demand for project managers.
”It’s telling me that companies and government agencies are rolling out
big projects,” says Melland. ”Irregardless of whether the work is being
done inhouse or is being farmed out to an outsourcer, they need a
qualified project manager. It’s also an early indicator of hiring to come
because you usually want to bring on the project manager first. It’s
another good sign.”