IT jobs outlook for 2009: The good and the bad

IT jobs outlook for 2009: The good and the bad

Summary: A depressing string of layoff announcements across the corporate world has gotten 2009 off to an inauspicious start. So what do the trends mean for IT employment in 2009?

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TOPICS: CXO, IT Employment
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A depressing string of layoff announcements across the corporate world has gotten 2009 off to an inauspicious start. So what do the trends mean for IT employment in 2009? Here’s a sober look at both the good signs and the bad.

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January has been brutal for U.S. workers. Company after company has announced layoffs, salary freezes, unpaid furloughs, hiring freezes, plant closings, and budget cuts. With all the bad news flooding the wire, it’s easy to forget that more than nine out of ten Americans in the workforce still have jobs despite the dramatic downturn.

Those who work in the IT profession are certainly not immune to the pain that has been afflicting the U.S. job market, but they do have a few factors going for them that could help many of them weather the storm better than some of their co-workers in other fields. Let’s take a look at several trends - the good and the bad - currently affecting the IT job market and then read the tea leaves to decipher what we might expect from the IT jobs outlook in 2009.

IT pro salaries went up in 2008

As part of its annual salary survey, the tech job portal Dice.com surveyed 19,444 IT professionals between August and November 2008. Dice reported that the average salary for working in IT is now $78,035, a 4.6% increase over 2007 ($74,570).

Other key findings from the survey include:

  • Job roles with the largest raises: Security analyst (8.4%), Software engineer (7%), Application developer (6.6%), and Network engineer (6%)
  • Outside of managers and executives, the highest paying job role in IT was Project manager, making an average salary of $103,424.
  • Several large metro areas saw significant jumps in average pay: Detroit (9%), Phoenix (8.5%), San Diego (8.3%), and Miami (7.7%)
  • The metropolitan areas that saw the largest increases in IT worker salaries were all mid-sized cities: Charlotte (14.7%), St. Louis (12.5%), Pittsburgh (11.9%), Portland, OR (9.3%), and Baltimore (9.2%)
  • As a whole, female IT pros make 12% less than male IT pros, although this number flattens out when comparing women and men with comparable job titles, years of experience, and educational levels

“That average tech salaries are rising even as the economy falls reveals how much has changed since the dot-com days,” said Tom Silver, Chief Marketing Officer at Dice. “Today many technology professionals are seen as core assets where they work. As they enhance their skills, they’ll need to align those efforts with the market’s shifting demands. However, over the long-term, updating and broadening one’s skill set is the key to continued salary gains.”

IT pros are worried about 2009

Despite the salary uptick in 2008, the respondents to the Dice survey also expressed some major fear and uncertainty about 2009.When asked about their biggest career concerns for 2009, the IT pros responded as follows:
  • Keeping skills up to date (22%)
  • Position elimination (20%)
  • Lower salary increases (14%)
  • Canceled projects / fewer projects (12%)
  • Increased workload, due to staff cuts (10%)

The survey also stated, “Dice reports a 67 percent increase in the number of new resumes posted to its site in the fourth quarter (year over year). Given that the majority of technology professionals who utilize Dice are currently employed, such ‘passive job hunting’ indicates greater anxiety about the job market.”

Companies with cash are still laying off workers

Tom Foremski over at ZDNet also spotted a disturbing trend. He did an analysis of several of the big tech companies that have announced layoffs and found that many of them have very strong balance sheets, with enough cash to weather the downturn without resorting to layoffs. The fact that they are still doing layoffs is a bad sign. It says that they do not have confidence that the economy will turn around anytime soon, otherwise they would simply use their ample cash to ride it out in the short term and come out stronger on the other side.

Here are the big tech companies that Foremski pinpointed:

  • Microsoft: $19.71 billion ($1.98 billion debt)
  • Apple: $24.49 billion (0 debt)
  • Intel: $11.84 billion ($1.99 billion debt)
  • Cisco Systems: $26.7 billion ($6.87 billion debt)
  • Adobe: $2.02 billion ($350 million debt)
  • Google: $14.41 billion (0 debt)
  • Yahoo: $3.2 billion ($63 million debt)

As Tom put it, “It’s tough to be laid off, [but] it must be tougher still to be laid off from a company with billions in cash - especially since you helped build that cash reserve.”

Who’s hiring?

Rafe Needleman over at Webware has a spreadsheet that tracks the tech companies that are still hiring despite the current economic malaise. Here is list of the some of the most recognizable companies on the spreadsheet and in parentheses you can see the number of open positions they have at the time this article is being written.
  • Intel (1000+)
  • Salesforce.com (400+)
  • Walmart IT (300+)
  • Apple (189)
  • Siemens IT (100+)
  • Garmin (100+)
  • Facebook (100)
  • Samsung (50+)
  • Research in Motion (50)
  • Yale University IT (45)
  • GoDaddy (45)
  • Omniture (35)
  • Mozilla (30)
  • Barracuda Networks (28)
  • Cisco (25)

At the time this article was written, Dice.com listed 56,830 open jobs in the IT field.

The bottom line

The biggest factor that IT professionals have going for them during this economic downturn is that many organizations are looking to IT to help the company streamline, automate, conserve energy, cut costs, reduce headcount, and generally do-more-with-less. In some cases, that will mean spending more money in IT in order to reduce costs in other departments.

On the other hand, one of the biggest targets for cuts in many organizations is central services, which is being whacked in order to reduce overhead. Highly-centralized IT departments will be a huge target in these types of organizations because IT professionals are typically well-paid on the salary scale and a centralized IT budget is typically a big number, which puts a huge bulls-eye on it.

Ultimately, some centralized IT departments that have not articulated their value well enough will be hit hard by this current economic downturn. However, a lot of others will seize on this as a great opportunity to demonstrate the value of IT at a time when the chips are down and a lot is at stake.

Topics: CXO, IT Employment

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14 comments
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  • Good and Bad Simultaneously

    CISCO is on the list of cash rich companies that are laying off ... They're also on the list of companies that are hiring tech. Recycling positions to lower the compensation package? Apple is on both lists, too.
    infoz
    • Recycling for lower salaries.

      Companies do this all the time, but usually not in such large numbers. This might not be so bad if the generally older and higher paid workers had health care as in other countries. Many times it can be a chance to try out a new career but here in the good old USA, the people who need it most, the people in lower paid jobs, have no benefits. So we all have to stay in the hunt for jobs similar to what we had. I am a fiscal conservative, it is not so much how much money we take in as where WE decide to spend it. WE are the government whether we take an active role or not. We need to invest in health care, education and alternative fuels and in conservation technologies. Creating new industries along the way.
      cyclist253
  • What happened to the SHORTAGE?

    How could companies both have a shortage of skilled workers, and also be laying off technology staff? Something doesn't add up. Some of the layoffs are NOT technology staff, at least not many, such as Google's HR purge.

    This downturn ought to dampen any talk of a skills shortage for many years to come. If it doesn't, something is very very very wrong.
    scott1329
    • Shortage and Simultaneous

      See my post above. If one part of a company needs staff while another part is being pressured to cut costs, you could have layoffs from the same organization that is complaining about shortage. That is probably the perpetual condition of help/service desk groups ...
      infoz
    • h1b

      because they are replacing current worker with cheapest h1b material, or you could say, kicking ass American to contract Hindus.

      magallanes
  • Where's the good news? unemployed at $78K==$0

    So, we can be unemployed at the rate of $78K instead of
    $73.5K, and in the mean-time scrabbling to use every
    freebie source of info to stay current, yet it all adds up to
    making $0 in income.

    Where's the analysis of how many "jobs" are body
    shopping (gigs, temp, contingent, services, consulting,
    contract, "solutions", etc.) versus how many are real full-
    time permanent jobs developing software products?
    Professor8
  • You can add IBM to the layoff list

    according to the [CWA site http://www.allianceibm.org/ ] IBM laying off 16,000 and is underway. IBM will not confirm the numbers but do admit to layoffs (after announcing record earnings).
    Telexer
  • RE: IT jobs outlook for 2009: The good and the bad

    The list of companies hiring shows the trends. Where will IT workers be needed when employees have netbooks and systems are SaaS? Salesforce.com (SaaS), Intel (netbooks), Cisco (the network does not go away) and Walmart (IT to lower the cost of goods and services). The only curious thing is why project managers are on the high end of the pay scale. The pending skills crunch, as boomers retire and get laid off, is going to be huge. If all you know is project management and current IT tools, how can you build stuff that is innovative or provides special value to your company? Answer: It will be a challenge.
    devils_advocate
    • Highly-compensated PM...? Not!

      I got a chuckle reading the "average" IT and PM salaries stated in the article. That, plus some earlier online research on the likes of glassdoor.com just confirmed what I already knew - that I'm way, way below the scale. No wonder why I'm still working while my gray-haired (read: high-dollar) peers were walked out the door in droves Dec. 1st - I'm way cheap to keep on for the Company considering the value I'm bringing in.

      I'm sure there are legions of similar PMP's out there with the same experience - close to twenty years of IT experience, certified and working for crumbs (when compared to the exec compensation). It's really penny-wise, pound-foolish considering the churn that will occur when the economy and demand returns in 1-2 years - pay your valued PM another 20K to keep him happy and on-staff, or see that experience walk at first opportunity for greener pastures.

      Really, Mr. C-level exec, is it truly less expensive to see him go in the long run? We both know that another 20K is peanuts in the overall scheme of things, especially considering how well the Company is doing (and how much revenue this PM contributed).
      Lt. Dan
  • Intel should be added to layoff list

    Which brings into serious question their hiring as well.

    ttfn

    John
    TtfnJohn
  • It's inevitable that compenstation will go down

    As the number of jobs declines so will compensation as there isn't the same need to pay the same salary/wages to keep employees.

    Also as employees (and contractors) are the largest expense on any company's books as the economy declines employers will reduce pay to save money just as night follows day.

    Also, the shortage seems to have vanished which makes overall hiring plans clearer and again reduces the need for higher compensation.

    Simple economics there.

    ttfn

    John
    TtfnJohn
  • RE: IT jobs outlook for 2009: The good and the bad

    Thats the plan, The "owners" in this share cropping economy have been accumulating and hording cash for several years now, toping it off with that fake rise in oil and gas prices. Remember the "giant sucking sound" of cash being extracted from us during that scam? The ultra rich have moved the evidence outside of US jurisdiction to Dubai (Haliburton)
    Now they want to drive the sharecroppers (us) to economic ruin and then scoop up all the shattered pieces of our lives at below bargain basement prices. All this talk about devaluing the dollar by federal spending scares them because that will nullthe gains and advantages the cash rich are counting on to continue to maintain this feudal charade we call "Free Market Economics". Giving workers and common folk access to earning a living with and through the government will make us less subject to the exploitation planned for us , once we have lost our jobs, homes, tax base (so called stake in the economy otherwise known as 401 K etc)and self esteem. IF you REALLY think that you are in the "in crowd" and you have less than 2 million in cash, clear and liquid... you are as primed for slaughter as a hen on a chicken farm. Dream on Mr&Ms. "upper middle class".
    worldwidepop.com
  • Average salary

    I wonder if the "average" salary is accounting for those that were laid off or that have been out of work for 3-6 months and have given up looking for a job in IT field for now.
    Silent Observer
  • RE: IT jobs outlook for 2009: The good and the bad

    While it is legitimate to post that Dice has 56,830 open jobs posted on their site, many of these are ghost positions, or positions that companies list just to look like they're active in technology. I keep a very detailed database on positions I have applied to. During the period of 2007-2008 I applied for 263 IT positions. Of these, 13% responded in one way or another. The other 87% did not even acknowledge my submission. This includes Walmart, Cisco, and Intel. While these numbers might be accurate on paper, it does not reflect the behavior of these firms posting these positions.
    rdavis61