Tech Pink Slips Soar

The American Electronics Association (AeA) released a report which found that more than half a million U.S. citizens lost their high-tech jobs from January 2001 to December 2002.

Specifically, 560,000 workers employed at high-tech firms such as HP, IBM, or Lucent were laid off in the two-year period that saw the storied dot-com bubble burst. Tech employment plummeted from 5.7 million jobs in January 2001 to 5.1 million jobs in December 2002.

AeA President and CEO William T. Archey said the findings strongly suggest “that there is a need for economic stimulus including the President’s package and specific proposals backed by the high-tech industry, such as the Homeland Investment Act…”

Introduced by the U.S. Senate, the Homeland Investment Act is one of several proposals put forth by politicians to jumpstart the U.S. economy. It calls for U.S. companies to invest offshore earnings in the U.S. economy. If passed, conservative estimates place the inflow of cash at $135 billion. But more recently, some private groups have upped that estimate to $200 billion or more.

To be sure, the economy remains sluggish and threats of war with Iraq continue to drag down the stock market, consumer confidence and the overall economic outlook.

High-tech manufacturing employment shrank by 415,000 jobs, a 20 percent drop, between January 2001 and December 2002, while the nation’s communications services industry saw a nine percent decline in its employment base with a loss of 135,000 jobs during the same period.

The data processing and information services segment saw a loss of 1,700 positions, from 561,200 to 559,500, while the computer rental and maintenance sector saw a whopping loss of 12,900 jobs, from 520,800 to 507,900.

But there does exist an encouraging anomaly for software specialists. While the majority of high-tech workers were hung out to dry, Archey said the market for software services actually increased by 5,300 jobs.

“This is consistent with the fact that many of the innovations in the high-tech industry are driven by software,” Archey said.

Still, in the crosscutting niche of software and computer-related services, 9,300 workers lost their jobs (from 2,201,000 to 2,191,700).

The study findings would seem to be solid, as they are based on employment data from the U.S. Bureau of Labor Statistics, but author AeA also happens to be the nation’s largest high-tech trade association, representing more than 3,000 member companies, so its reach is broad.

Meanwhile, employed IT workers are suffering from low morale, and 71 percent of the IT managers that were surveyed for a 2003 Meta Group, Inc. report indicated that IT employee burnout is currently a serious issue in their organizations.

“Working through this prolonged recession, which has seen budget cuts across the enterprise, numerous staff cutbacks, and general sector uncertainty, has definitely taken its toll on IT employee morale. Unfortunately, it is those same budget cuts that are impeding managers from combating the problem by way of making concrete improvements,” says Maria Schafer, program director of META Group’s IT Human Capital Management Strategies.

Companies are recognizing the issues of employee dissatisfaction and more than half (55 percent) of the companies surveyed have begun implementing skill development programs as a means to boost employee morale, while 24 percent have created better overall retention programs.

“Until budgets loosen, managers will be implementing internal career-advancement incentives in the form of skill development and retention programs. Proactively addressing these issues is essential to avoid a loss of productivity over the longer term,” commented Schafer.

The study also found that 11 percent of the companies raised salaries in an effort to raise morale, while another 11 percent hired more staff, and 8 percent offered cash incentives. Only 5 percent moved the company to a new location altogether in an effort to lure skilled workers and reduce employee malaise.

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