Economic crisis fuels job concerns

The economic crisis seems to be getting worse by the week. Should IT pros be worried about getting laid off? The possibility certainly exists, especially in the financial sector, but some job market observers say there have not been widespread impacts on IT workers so far.

Outside of the financial services segment, “we haven’t seen it trickle down into hiring of IT resources … as much as we would have thought by now,” Sean Ebner, vice president of professional services for Technisource, told me recently. “There still seems to be a healthy demand for technology resources.”

IT executives remain cautiously optimistic overall, David Foote, CEO and chief research officer of IT workforce research firm Foote Partners, said in an interesting interview published by Computerworld this week.

But about 40% of companies have cut their 2008 IT budgets, Foote said. “Bottom line, considering the lag time between business decisions and direct labor-market effects, we won't see much IT workforce reduction or jobs being outsourced this quarter, except perhaps those that are bankruptcy-related,” Foote told Computerworld. “But starting next year, thousands of permanent IT professionals will be incrementally cast off from employers large and small. Many will find new employment, join the ranks of the ‘partially employed’ or return to school. This isn't a big deal, though, considering that the overall size of the U.S. IT workforce is approximately 4 million.”

There are certainly some bad signs for IT pros. A survey of 50 CIOs found that one-quarter has decided to freeze IT hiring, Network World’s Denise Dubie reports. The U.S. high-tech industry added 78,300 jobs between January and July this year, but that’s less than the 111,400 tech jobs added during the same period in 2007, according to a report based on Bureau of Labor Statistics data.

"This is the fourth straight year that the U.S. tech industry is adding jobs," CEO Christopher W. Hansen of the AeA technology trade association said in a press release. "But the pace of growth is slowing, and given the economic downturn and current disruption in the financial markets, future job growth will be – at best – uncertain.”

Numerous venture-backed companies have announced recent layoffs, according to the Dow Jones VentureWire Alert. Online video company Heavy cut 14% of its staff, while layoffs have also been announced at Wikia, Hi5 Networks, Pandora Media, SearchMe, Zillow.com, Jive Software and others, Dow Jones said.