IT employment passes 4 million again, regains recession losses

Magic mark reached for first time since 2008; do Cisco, HP woes indicate trouble ahead?

In November 2008, two months after Lehman Brothers declared bankruptcy and Hewlett-Packard announced plans to lay off some 25,000 workers, IT employment reached 4 million for the first time.

From that point on, the economy worsened rapidly and companies rapidly shed jobs. By mid-2009, nearly 200,000 IT jobs disappeared.

The recession was particularly hard on older IT workers. For women in IT, age 55 and above, the unemployment rate hit 9.4% last year.

TechServe Alliance, an industry group of service companies that analyzes U.S. Bureau of Labor Statistics (BLS) data, said Monday that IT employment has finally returned, surpassing the November 2008, 4 million high point for the first time.

The new record came in February, but wasn't known until this month following a subsequent and routine revision of BLS data, according to Mark Roberts, CEO of TechServe. "I think [4 million IT jobs] is an important psychological milestone," he said.

Roberts said TechServe Alliance has seen strong demand from IT staffing firms, typically a bellwether for broader IT hiring.

"I would characterize demand for IT professionals as very strong," said Roberts. "Given the severity of the recession, many projects were shelved, hiring was severely constrained, layoffs were commonplace."

IT employment, now at 4,009,900 jobs, has increased for 16 straight months, he added.

Nonetheless, there are some signs of trouble ahead.

Cisco is widely expected to be on the verge of a major layoff, and a recently leaked memo by Hewlett-Packard CEO Leo Apotheker warned of "another tough quarter," according to a report in the Wall Street Journal.

HP is being hurt, in particular, by slumping PC sales. Though HP today reported a net profit of $2.3 billion on revenue of $31.6 billion for the second quarter ended April 30, up from a net profit of $2.2 billion and revenue of $30.8 billion a year earlier, it said that its personal systems group, which includes commercial and consumer products, was down by 5%.

The company did note that revenue generated by the sale of servers, storage and networking grew by 15% in the second quarter while software revenue grew by 17%. Services revenue, however, only increased by 2%, it said.

Roberts believes the issues faced by Cisco and HP are unique and don't reflect a broader trend.

"The data and anecdotal reports all point to strong growth going forward," said Roberts.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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