Obama says stimulus helps keep IT jobs onshore

The White House claim today that the U.S. has created or saved about 2 million jobs as a result of federal stimulus spending is not evident as far as IT is concerned -- not yet at least.

President Barack Obama talked about the impact of the stimulus today to mark the one-year anniversary since signing the Recovery Act, which set aside $787 billion in spending and tax cuts.

But despite the stimulus spending so far, employment of high-skilled, high-wage information technology professionals has shown little improvement. In January, IT employment increased by about 13,000 jobs, its best month in more than a year but still modest.

Layoffs have left a lot of ground to cover, and nearly all the major tech companies have cut their workforces. One bellwether company, IBM, is due to release its 2009 annual report this month with updated worldwide employment figures, and it may show a U.S. workforce decline of 115,000 to 105,000 for the year, according to testimony by a company official in November before the U.S. House Subcommittee on Workforce Protections.

An IBM spokesman said today that this U.S. workforce figure is accurate through October.

IBM employs about 400,000 globally. In 2007, IBM employed 121,000 in the U.S., but has increased at the same time its hiring in India and other overseas markets.

"You cannot have an economic recovery when good paying information technology jobs are slashed in the US, the workers terminated and the work shifted offshore," said Lee Conrad, national coordinator of the Alliance@IBM/CWA Local 1701, a union that has been trying to organize IBM workers.

"These are the jobs workers trained for when the manufacturing jobs were offshored," Conrad said. "Now these jobs are going to low cost countries. You also can not have an economic recovery when these workers see their jobs disappear and their wages vanish."

White House touts IT

Obama said today that "the jobs of the 21st century are in areas like clean energy and technology, advanced manufacturing, new infrastructure."

"That kind of economy requires us to consume less and produce more; to import less and export more. Instead of sending jobs overseas, we need to send more products overseas that are made by American workers and American business," Obama said.

The President said the last third of the stimulus will be spent "rebuilding our economy on a new and stronger foundation for growth over the long term."

He said the Recovery Act is on track to save or create another 1.5 million jobs this year.

The U.S. has lost about 200,000 IT jobs, from its peak of 4 million in November 2008.

Michael Balsam, the chief solutions officer at the Seattle-based Oniva Inc., which tracks government contract spending, said the majority of jobs created so far by the stimulus have been in the public sector, in occupations such as teaching and law enforcement.

But this year, Balsam expects to see more spending shift to the private sector, particularly on the infrastructure and foundational work needed for energy and health IT, and a lot of that will involve technology.

"As energy and health care spending picks up velocity you will see an impact on technology spending," Balsam said.

One aspect of the market for 2010 that has seen an improving outlook is offshore outsourcing. The Indian IT services firms have been hiring in expectation in demand from overseas clients.

Syntel Inc., a Troy Michigan-based firm that IT and knowledge process outsourcing firm that has most of its workforce overseas, is a company that expects the year to improve. Last week, it reported that its fourth quarter revenue increased to $117.8 million, up 12% from year-ago quarter and 12% sequentially.

"As we look forward into 2010, we are optimistic that demand for offshore services will continue to progress," Syntel Chairman Bharat Desai said in last week's announcement. "We anticipate that our clients' budgets will remain relatively flat in 2010, however we believe that a larger share of their spending will be allocated to offshore partners."

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.

Copyright © 2010 IDG Communications, Inc.

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