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U.S. IT Jobs Fall, Unemployment Hits 3.2%

The job losses are a sign of how quickly IT budgets tightened at the end of 2008, after holding relatively strong through the first half of the year.

The United States lost 260,000 information technology jobs in the fourth quarter, a 6.4% drop from the previous quarter, according to data posted this week from the Bureau of Labor Statistics.

That sent IT unemployment to 3.2%, its worst level since early 2005.

The job losses are a sign of how quickly IT budgets tightened at the end of 2008, after holding relatively strong through the first half of the year. At midyear, U.S. IT employment hit an all-time high of 4.13 million. It's now just under 3.8 million, 0.6% below the level one year ago. IT departments typically spend around one-third of their budgets on staffing.

Even at 3.2%, IT unemployment is nowhere close to 2002 and 2003, when waves of IT layoffs shot unemployment above 5%, part of a backlash against what was seen as excess IT capacity at many companies. Currently, IT unemployment is exactly even with overall professional unemployment, at 3.2%.

The prospects for near-term IT job growth look weak, with less than half of companies hiring even to fill IT openings, according to an InformationWeek Analytics research survey of 451 IT professionals conducted late last year. Just 14% said their companies will expand staff in 2009, and 29% will fill positions that become open. The rest have frozen jobs (44%) or are cutting (14%). (The full InformationWeek Analytics report, Outlook 2009, will be published in late January.)

In the fourth quarter, employment fell in seven of the eight IT job categories the bureau tracks. Only computer scientists and systems analysts rose in the quarter, up 3.4% from the prior quarter. Compared with one year ago, three categories gained jobs: computer scientists and systems analysts; software engineers; and network systems and data communications analysts.

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