February 21, 2009
"In a fight between a grizzly bear and an alligator, the terrain determines the winner."
-- Anonymous

As IT Job Losses Grow, The Impact Worsens

Jan 22nd, 2009 | By Mike Dailey | Category: IT Career Management, Latest Articles

In a move that surprised few in the industry Microsoft has announced a round of job cuts amid falling financial earnings.  Some blog posts are questioning where in Microsoft the cuts will occur, and some are speculating as to the reasons for the cuts.  No matter where or for what reason we knew that Microsoft would not be immune to the current economic situation.  Few companies are weathering the economic storm well, with most cutting costs in every way possible including the reduction in head count.  With companies such as Microsoft, IBM, and Intel all making what is being reported as major reductions in their workforce we have not only a worsening overall unemployment situation but now the potential for a far worse unemployment situation in the Information Technology field, as well.

We all know that the IT communities in our respective hometowns are much smaller in the job market than the local economy as a whole.  Unless you live in Silicon Valley this is most likely the case in your area, as it is for most of us in the field.  As the large numbers of jobs continue to be cut in the tech industry we are left to wonder where our peers will go.  While there are positions out there it does not appear that we have enough openings in the industry to counter the impact of the increasing number of unemployed IT professionals.  With so few openings and so many technical professionals seeking a new opportunity the technical job market is being flooded with skilled and experienced IT professionals.

What will the result be?  It is too early to tell, but several possible outcomes come to mind:

1.  With almost certainty we can count on the average salaries for skilled IT professionals to decrease.  Organizations are not blind to the fact that technical skills can be had at a cheaper rate today than only a few short years ago.  This will drive down the salaries, pay increases, and bonuses for most of us in the field.  Only those individuals having key, specialized and in-demand skills will be able to avoid the impact.

2.  The demand for consulting services will grow.  As organizations shed in-house positions there will be a rising need for consultant and contract personnel to complete projects, maintain systems, and resolve issues.  With the high number of technical positions being shed the most experienced of the affected IT professionals will find their niche with consulting and contracting firms throughout the country.

3.  For those of us remaining in full time in-house positions we will be required to adjust to a new way of doing our jobs.  There will be less hands to tow the line and a greater dependency on outside resources to augment our technical staffs.  Budget dollars will shift to cover the costs of consulting and contract services, where the majority of project labor will be obtained.  In-house resources will likely be driven to more of a support and maintenance role due to their intimate knowledge of company systems, services, and architectures.

4.  Many IT organizations may adopt the frightening attitude that their staff is now fully expendable.  With so many available personnel in the market for these positions we may see IT managers, CIOs, and HR personnel using this as way to keep complaints down and productivity up. 

5.  Will there be a stall in the deployment of new business systems and services?  It depends.  Organizations will move forward with initiatives that are likely to increase profits but will also shelve those projects that are not considered critical to the bottom line.  The impact on the technology market is already being felt as the sounds of tightening purse strings echo through the industry.  As less systems and services are purchased the repercussions may be felt long after the economy begins to recover.  This may delay for the long term the rehiring of the technical personnel still finding themselves without full-time employment.

These are just a few of the potential outcomes we may see as a result of the increasing numbers of IT professionals finding themselves out of work.  The important thing to keep in mind is that we all must focus on maintaining our own positions for not only the benefit of ourselves and our families but our employers, as well.  Because of the economic impact on the bottom line we need to put aside our fears and concerns and commit our collective efforts towards ensuring the success of every organization we are involved with. 

It goes without saying that the survival of every business helps to ensure our individual financial stability, but it also helps to ensure the survival of the IT industry of a whole.  As each company sheds more jobs the impact will be felt on the IT community for what may be years to come.

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Mike Dailey is an Information Technology Architect and Senior Network Engineer specializing in the design, integration, and management of complex computer network and data security solutions for medium and large enterprises.

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