The unemployment rate is the highest in memory. The IT labor force contracted in November to 2.78 million, from 2.94 million workers in October. The number of jobless IT workers rose to nearly 154,000 last month, from 147,000 in October.
IT joblessness remains at historic highs as many technology jobs that had once seemed secure fall victim to the recession and the aftermath of the Sept. 11 attacks. In November, the IT unemployment rate jumped one-half percentage point from record-high levels posted earlier this fall, rising to 5.5% from 5.0% in September and October, according to an analysis of figures released this week by the Labor Department's Bureau of Labor Statistics. A year earlier, IT unemployment stood at 2.0%. Overall unemployment last month reached 5.7%, a six-year high.
The 5.5% IT unemployment rate is the highest in memory. Between 1963 and 2000, the annualized IT unemployment rate peaked at 3% in 1991 and 1992, the years of the last recession, and bottomed out at 1.3% in 1997, the start of the dot-com boom. Expect another historic high next month, Meta Group analyst Maria Schafer says. "I wouldn't be surprised to see it go to 6.3% or 6.4% in the coming months."
But companies laying off IT workers may face a challenge when the economy does recover--namely, finding the right IT talent to help execute a stockpile of projects. "In many cases, companies are in survival mode and can't afford to move forward," Schafer says. "But when they do, they will be churning up things quickly. There's a substantial amount of demand for people and projects that's been put on hold."
Some companies are hedging their bets by not firing employees but furloughing them, with the intent of calling them back if conditions turn around. Many employers bent over backward to hire the right IT people a couple of years ago and were reluctant to let them go after spending so much money to recruit them, says Scott Brown, chief economist at Raymond James & Associates. By furloughing employees, companies can avoid hefty recruiting costs. "It would be tougher to hire those IT workers if economy were to turn on a dime," Brown says.
The IT unemployment rate comes from statistics culled from household surveys conducted each month by the Bureau of Labor Statistics and reflects three categories of IT-related occupations: computer systems analysts and scientists, computer programmers, and computer operators. Computer programmers experienced the biggest increase in joblessness, with their unemployment rate soaring to 7.8% last month, from 1.7% a year earlier. Computer systems analysts' joblessness rose to 4.5%, from 1.8% in November 2000.
The IT labor force contracted in November to 2.78 million, from 2.94 million workers in October. The number of jobless IT workers rose to nearly 154,000 last month, from 147,000 in October.
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