WASHINGTON -- Everyone knows by now that this is supposed to be a perilous time to hold a technology-related job.
Well-publicized layoffs at bellwether firms such as Yahoo, Cisco and Ericsson have spooked current employees, while leaving hundreds of thousands of their former officemates hunting for jobs. Citing a slowing economy, old-guard companies such as Disney, Visa and Dupont have also slashed payrolls.
So why, then, is the overall number of jobs in the computer industry steadily increasing?
Preliminary figures from the U.S. Department of Labor show that between February and March of this year, companies in the computer and data processing sector added -- not dropped -- a combined total of 12,000 jobs. In fact, the March 2001 data show a jump of 100,000 jobs from a year ago.
While that may not cheer up someone who's been laid off and searching for new work, the numbers suggest that the job market is not as moribund as many people think.
Because U.S. unemployment has remained relatively constant -- it was 4.3 percent last month -- laid-off workers seem to be rehired pretty quickly. In the United Kingdom, the unemployment rate is even more impressive: It's at a 25-year-low, with just 996,200 people -- or 3.4 percent -- out of jobs.
Bob Cohen, a spokesman for the Information Technology Association of America said he knows why the demand for tech workers remains high. "There's growth in more traditional IT companies, firms in enterprise and systems integration areas," Cohen said. "The vast majority of IT workers work for non-IT companies that are not necessarily sharing the fate of the dot-coms."
A recent ITAA study, which randomly sampled 685 hiring managers at tech and non-tech firms, predicted a 44 percent decrease in demand for tech workers in 2001 compared to last year.
But, paradoxically, that figure doesn't represent a decline in tech employment, which continues to grow. According to the study, employers will attempt to fill 900,000 IT jobs this year but anticipate a shortfall of 425,000 workers because of a talent gap.
One explanation for the difference between public opinion and reality is that corporate layoffs almost always draw news reports, while announcements of job opportunities do not. Another explanation is that announcements of layoffs are skyrocketing -- but actual layoffs are not.
The Employment Policy Foundation, a think tank in Washington, released a study earlier this month that said the rate of announced job cuts jumped 113 percent in the last nine months compared to the first half of last year. But, the group concluded, actual job losses increased only nine percent.
EPF said one contributing factor is a 1988 law called the Worker Adjustment and Retraining Notification Act, which encourages employers to make public statements about job cuts -- "even if the plan is tentative or will be spread out over many months," the group says, and even if other areas of the company are hiring.
Anne Griffith, research director for the Software and Information Industry Association, conceded that the industry's growth has slowed -- but says that's no reason to panic.
"When analysts and the public have expectations of 100 percent growth per year," Griffith said, "it's pretty easy not to meet those expectations."
"It seems to me what we're running into is a difference in Wall Street stock value determinations and actual sales," Griffith said. "Sales have slowed, but we're not seeing a huge increase in software companies going under ... And just because a software company isn't growing as fast as it used to doesn't mean it's in trouble."
Two other recent studies have also pointed to a rosier scenario.
One study, put out by Webmergers.com, reports a slowdown in tech company closings. Another study by Techies.com echoes ITAA's finding: Demand for tech workers is slowing but not evaporating, and employers are becoming more fussy about the skills they want in a new hire.
Even employers may not be benefiting from today's labor market, says Peter Cappelli, a professor of management at the University of Pennsylvania's Wharton school of business. "There aren't that many people looking for jobs," Cappelli said, "and not many people want to leave their job."
Cappelli added: "It's not clear that these companies haven't hurt themselves. In the upturn, they're going to be down employees."
