While the pace of downsizing declined significantly for most industries in 2010, the technology sector fared particularly well, with employers announcing plans to cut 46,825 during the year. That was 73 percent lower than the 174,629 technology job cuts in 2009 and the lowest annual total for the sector in records going back to 2000.
The latest report on technology sector job cuts released Monday by global outplacement firm Challenger, Gray & Christmas reveals that planned layoffs plummeted in the second half of 2010. Employers in the sector, which includes computer, electronics, and telecommunications firms,
announced 35,375 job cuts between January and the end of June 2010. From July through the end of the year, job cuts totaled 11,450; a 68 percent drop.
The 73 percent decline in year-over-year job cuts achieved by the sector exceeds the 59 percent decrease in overall job cuts across all industries, which fell from 1,288,033 in 2009 to 529,973 in 2010.
The 46,825 tech-sector job cuts accounted for 8.8 percent of all job cuts in 2010. That is the lowest percentage of technology cuts on record. It is down from 13.6 percent in 2009. In 2001, at the height of the dot.com collapse, technology sector job cuts reached a record high of 695,581, representing 36 percent of all job cuts announced that year (1,956,876).
The most significant drop in technology-sector job cuts was experienced by firms in the electronics industry, which saw job cuts plunge 92 percent from 65,300 in 2009 to 5,072 last year. Job cuts by computer firms dropped 66 percent, while telecommunications companies saw job cuts decrease by 55 percent.
“Many industries are still struggling, even as the economy recovers. The technology sector does not appear to be in this camp, however. These firms are definitely on the leading edge of the recovery, as companies across the country and around the globe begin to upgrade and reinvest in their technology. The surge in smart phones and tablets alone is helping to drive growth in electronics, telecom and computers,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Industry analysts expect the tech sector to continue its recovery in 2011. According to a survey by the trade publication InformationWeek, 55 percent of information technology professionals said their companies will increase IT spending in 2011, while only 19 percent expect IT spending to fall and 26 percent expect it to remain unchanged. Meanwhile, Forrester Research forecast that 2011 IT spending will increase 7.5 percent in the US and 7.1 percent globally.
Technology jobs will not only see gains in the coming the coming year, but they are among the occupations that will realize the fastest growth over the next decade. The number of network systems and data communications analysts is expected to increase by 53 percent by 2018, while the number of computer software engineers expands by 34 percent, according to projections recently released by the Bureau of Labor Statistics.
“None of this means that finding a job will be easy for technology workers in 2011. Finding a job is never easy, even in the best economy. Despite the potential for improved hiring in the new year, there are still a lot people competing for every opening and many employers are very particular about what skills and experience they want new workers to have,” said Challenger.
“It is critical that technology workers continually update their skills in order to remain competitive. It is necessary to maintain a balance between having specialized skills and having the flexibility of a generalist. It may also be necessary to expand one’s search to more industries or geographically,” he advised.