How many IT pros have lost or are in serious danger of losing their jobs because of the Wall Street upheaval? People lose or quit their jobs for all sorts of reasons, so estimating how many have or will become unemployed based just on the turmoil in the financial services sector is tricky. But compared to overall direct job losses, only a small portion will be IT workers.
That's encouraging. In general, how will IT jobs be affected? Clearly, the pressure on corporate expenses has gotten more acute, especially in the banking and financial services, auto, airlines, and housing industries. Bank of America and the other beneficiaries in the recent investment bank acquisitions will of course be consolidating operations and analyzing their IT workforce bloat, with labor reductions expected further down the road. Embattled Wall Street firms will start high, shedding high-salaried, midlevel IT management first, and fast. But in their general IT populations, there are such rich skill sets. I think many IT pros, if cut, will find new jobs, though at a lower salary, in a different industry and maybe not locally.
If anything, more companies are now examining mission-critical vs. non-mission-critical IT spending. IT workers in the former will be safer, including those supporting daily operation of core networks, strategic applications, disaster recovery and security. For financial services and other regulated industries, add data processing, compliance systems and key risk-management systems.
For non-mission-critical projects and initiatives, unless the payback period is 12 months -- or even less, considering the general mood of pessimism out there -- you will see slowdowns and outright IT spending holds affecting IT jobs in the hardest-hit industries.
But in broad terms, IT executives remain cautiously optimistic. About 40% of companies have cut their 2008 IT budgets, which may increase a tad. U.S. IT spending projections for next year will shift from slightly above to below this year's 5.5% rise.
Bottom line, considering the lag time between business decisions and direct labor-market effects, we won't see much IT workforce reduction or jobs being outsourced this quarter, except perhaps those that are bankruptcy-related. But starting next year, thousands of permanent IT professionals will be incrementally cast off from employers large and small. Many will find new employment, join the ranks of the "partially employed" or return to school. This isn't a big deal, though, considering that the overall size of the U.S. IT workforce is approximately 4 million. Some independent consultants may suffer, but the diversified, global IT services vendors will suffer only minimally and will continue to hire to fill demand. Job losses overall will be industry-driven, surgical and well thought-out.
There's still demand for IT pros with certain skills. What are some of the safer ones? In addition to areas I just mentioned, our research indicates that companies will be hiring and retaining architects, business analysts, project and vendor relationship managers, process and security experts, a variety of customer-facing jobs, and specialists in ERP and enterprise applications areas, especially SAP. Regarding skills, our research points to security, storage/SAN, data mining, database and data management, virtualization, and mobile operations talent as remaining in high demand. Several point skills such as AJAX, PHP and .Net will be strong as well.
How difficult will it be for the newly unemployed to remain in the IT workforce? The good news is that since the last recession, employers have shifted more of their IT operations to third-party providers and consultants, and CIOs have become shrewd fiscal disciplinarians. So this time we aren't going to see across-the-board IT bloodletting and IT pros leaving the profession in droves. It's still about playing the odds as far as targeting the right skill specialization, geography and industries. Consulting remains a great place for experienced or hot-skilled workers to direct their careers.
-- Compiled by Jamie Eckle.
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