Wednesday, February 21, 2024

Offshoring Not Exactly a Tidal Wave

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Offshoring accounted for less than 2 percent of IT layoffs in the first quarter of 2004, according to the U.S Bureau of Labor Statistics (BLS), which has begun culling which jobs are lost to firms overseas.

The numbers helped provide new data in the debate about how many IT jobs are actually being shipped off-shore in the technology industry. According to the BLS numbers, IT related categories that were offshored were higher than the 2 percent overall figure.

The BLS report, ”Extended Mass Layoffs Associated With Domestic and Overseas Relocations,” for the first quarter of this year, said 239,361 private sector nonfarm workers who were ”separated from their jobs” for at least 31 days in the first quarter of 2004. Of that amount, 4,633 workers were associated with the movement of work outside of the country, according to the BLS data.

Of those 4,633 workers that were reported as being ”offshored” by the BLS, 65 percent came from manufacturing sectors. The Midwest bore the brunt in this category with 34 percent of the job loss, followed by the South at 31 percent, the West at 27 percent and the Northeast at only 8 percent.

IT-related employment numbers were not not specifically separated in the BLS report, though they were in part contained under the manufacturing numbers under the Computer and electronic products heading. By that measure, 785 jobs were offshored out of a total of 3,912 job losses, or about 20 percent.

Under another sub-category called Information showed that 18 percent of job losses were offshored (1,449 out of 7,837 jobs lost in that sub-group).

Under the category titled Professional and Technical Services, 3,363 jobs were lost in the first quarter; the BLS said it was unable to provide accurate statistics for which jobs in this number were relocated elsewhere in the world.

The BLS said the numbers are by no means comprehensive or complete and do not cover the entire spectrum of US Labor activity that may have been affected by offshoring over the last several years. However, the statistics are based on layoffs at companies employing 50 or more workers and are counted when at least 50 employees filed for unemployment insurance during a five week period with a layoff of more than 30 days.

The labor report is the first time the BLS has included offshored jobs since it began to track that group in January 2004.

The data follows a wave of research looking at the offshoring trend in the IT industry.

A recent study from Meta Group found that 20 percent of its survey respondents offshore IT jobs. In March, Gartner Group released a report that indicated only 5 percent of US IT jobs were currently offshored with an estimated 25 percent to be offshored by 2010.

This article was first published on

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