Final tally: IT lost 250,000 jobs last year

But software services saw the smallest dip and is now quickly recovering

WASHINGTON -- The U.S. tech industry lost about 250,000 jobs last year, about 4% of its total workforce, but is seeing signs of a hiring turnaround, particularly in software services, according to TechAmerica, an industry group.

But tech, even in a downturn, remained one of the better occupations. Although the overall unemployment rate was about 9.3% last year, for computer programmers it was 5.2% and for computer scientists, 6.1%.

The most resilient tech segment last year was software services, which employs 1.9 million people. It had a decline of 1.2% or fewer than 21,000 people when compared to 2008. The largest job loss was in tech manufacturing, which shrank by 8.1% or 112,600 jobs.

In the fourth quarter of last year, software services grew by 10,100 jobs or .6%.

"We were the last major industry into the recession, and we hope that led by software services we may be the first out," said Jose James, director of research and industry analysis at TechAmerica.

The top state for technology jobs is California, which had nearly 1 million jobs out of the 5.9 million employed nationally in tech. In second place is Texas at 492,000. Rounding out the top five is New York, 309,000; Florida, at 292,000 and Virginia, 283,000. This state-by-state data is for 2008 when hiring cuts were just beginning. Nonetheless, the data gives some insights on the trends and on which states are showing jobs improvement.

Phil Bond, TechAmerica's president and CEO, said that among the things his group is seeking from Congress to help improve the tech business climate overall is an extension of the research and development tax credit, which is "grievously overdue."

Without this tax credit, "we are de facto encouraging the outsourcing of innovation around the world," Bond said. A number of other countries, including Canada, have more generous provisions in their R&D tax credit programs than the U.S., he said.

The group is also urging the U.S. Department of Health and Human Services to move ahead on its health IT programs. Bond said health IT "will require tens of thousands" of new highly skilled workers and will have "a very positive, stimulative effect" on job creation.

A number of groups analyze U.S. Bureau of Labor Statistics data to report on tech workforce trends and most approach it differently. TechAmerica includes tech manufacturing in its annual assessment, while some others do not. But while the groups may approach the data differently, they do agree on trends. The TechServe Alliance, for instance, reported a decline of approximately 200,000 IT jobs from a total of 4 million jobs in the fall of 2008. That group doesn't include manufacturing jobs.

The Institute of Electrical and Electronics Engineers (IEEE-USA) looks at employment growth in the engineering sector, and reported Tuesday that hiring grew 7.8% from the fourth quarter of 2009 to the first quarter of this year.

Software engineering employment was essentially unchanged quarter to quarter, but remains 5.3% above its first-quarter 2009 low, the IEEE said. IEEE-USA President Evelyn Hirt said in a statement that "re-employed engineers, scientists and other technology professionals will help create more jobs and ratchet the economy forward."

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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