Jobs in technology sector safer than in dot-com bust

by Editor 10/23/2008 4:32:00 PM
The technology industry is facing bleak days ahead, with venture-capital investment in hi-tech at its lowest point in more than a decade. However, industry employment experts at the US Department of Labor say that the job cuts in the technology sector are unlikely to be as deep or as lasting as those during the dot com bust.

Technology firms have not embarked on a hiring binge similar to the one in the late 1990s, when technology employment growth was in double digits, boosted by Internet investment, need for new employees who would handle Y2K transition issues, and enormous cash injections in the telecommunications infrastructure.

The Web 2.0 boom in the last few years has been relatively minor in comparison. The majority of the estimated 5,000 Web 2.0 companies are small enterprises and the total number of employees probably does not equal even a tenth of IBM’s 386,000-employee workforce.

None of the technology giants have had a significant increase in recruitment in the last several years. Google, with 20,000 employees, may be an exception, but industry analysts expect the search engine company to be resilient to almost any economic conditions at this point.

“We never saw the big run-up in tech hiring in 2004 through 2008, so I don’t anticipate a significant change,” says Tom Silver, chief marketing officer Dice Holdings, which runs a technology job-placement site.

Remembering the late 1990s, he says: “We had the perfect storm. The combination of interest in the internet, telecom and Y2K all led to a significant overheating in the technology labour market leading up to 2000.”

In the aftermath of the dot com crash, technology unemployment hit a new high, rising above the national average. (Typically, it runs at about half the national average in the US.) The Labor Department’s Bureau of Labor Statistics says that there is no reason to expect the present crisis to change the ratio in this downturn.

Last month’s ratio confirms this: unemployment in the IT sector ran at 2.6 percent, while the national unemployment average stood at 6.1 percent.

 Browse and apply for IT consulting jobs on TopITconsultant's job board.

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