Shrinkage of tech jobs slowing

Date: Tuesday, October 07, 2003 2:43 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Harris Miller of the ITAA can't seem to give up on the shortage
shouting. He is now claiming that 493,400 IT positions will need to be
filled by May 2004.

Even Challenger, Gray & Christmas are sounding the grim news, but
Miller seems unscathed.

I decided to do some calculations to see just where Harris Miller went
wrong. According to the 3rd article at least 15 percent of the 2.81
million jobs lost in America since the decline began have reappeared
overseas. Taking 15% of 2,810,000 gives a total of 421,500, which is
close to Miller's number.

So now we know where Miller went wrong: he got jobs lost to offshoring
with IT shortages mixed up. If Miller is so confused, how does he
manage his collection of vintage Mercedes Benz cars?

http://www.suntimes.com/output/business/cst-fin-techjobs07.html

Shrinkage of tech jobs slowing

October 7, 2003

BY FRANCINE KNOWLES Business Reporter

Technology-related job cuts dropped more than 50 percent from a year
ago, which could signal the sector is poised for a turnaround,
according to the latest report from Challenger, Gray & Christmas Inc.

There were 47,998 high-tech job cut announcements in the third quarter,
which brought the total for the year to 145,997 the Chicago-based
outplacement firm said. That is 56 percent fewer than the 334,650 job
cuts announced in the year-ago period.

"I think the worst is over," said Challenger Chief Executive Officer
John A. Challenger. "There are signs that tech growth is renewing.
Hopefully that's going to mean job creation isn't far behind."

Among the signs are positive reports from Cisco Systems Inc., which had
higher than expected sales in August, and from Dell Inc., which said
small business and consumer spending on computer equipment is up,
Challenger said. He also pointed to a Merrill Lynch survey of 100 chief
information officers, which found that 2004 information technology
budgets are expected to rise 4 percent.

Expectations of a major rebound could be premature. The third-quarter
job cut number still exceeded the second-quarter figure by about 9,000.
Most of that increase came from the telecommunications sector where job
cuts soared 73 percent to 62,389, Challenger said.

The Information Technology Association of America found that 493,400 IT
positions will need to be filled by May 2004. That's a far cry from
vacancy levels in the late 1990s and 2000 when employers were trying to
fill about 1.6 million positions, Challenger said.

In the past 33 months, companies have announced more than 1.1 million
high-tech job cuts. Many of those jobs might be gone forever, given the
increased offshore outsourcing of technology jobs, Challenger said.

The sector is evolving, he said.

"As the tech sector grows, it's going to be a global labor market," he
said.

He cited a prediction by technology consulting firm Gartner Inc. that
by the end of 2004, 10 percent of jobs with American-based IT vendors
and service providers will move to emerging markets.

"But there are certain kinds of jobs that will stay here,'" he said.
"Small and medium-sized business that do most of the job creation in
this country have been building IT systems. They need people to work on
their help desks, in training and developing...systems."

They also need people to help manage their technology, he said.

Copyright ) The Sun-Times Company
All rights reserved. This material may not be published, broadcast,
rewritten, or redistributed.

http://feeds.bignewsnetwork.com/?sid=5cecbefec82ef216

Wednesday 8th October, 2003

September job news not encouraging

Big News Network.com Wednesday 8th October, 2003

While last week's government employment report seemed encouraging, the
employment situation is not improving for most American workers.

It is true that payrolls expanded by 57,000, but many workers are being
forced to take lower skilled, lower paying jobs and in some cases,
workers are earning 43 percent less in each paycheck, John A.
Challenger, chief executive officer of outplacement firm Challenger,
Gray & Christmas, said in a statement. More people are working
part-time jobs.

Challenger, Gray & Christmas said for every person added to the
civilian labor force in September, 16 people left and the number of
Americans not in the labor force grew by 257,000, based on Department
of Labor statistics.

Furthermore, a growing number of job seekers have been out of work for
six months or longer, Challenger said.

None of this bodes well for retailers depending on strong holiday sales
nor for the entire economy, which has mostly relied on consumer
spending to keep it afloat.

http://www.nytimes.com/2003/10/05/business/05ECON.html

October 5, 2003

A Missing Statistic: U.S. Jobs That Went Overseas

By LOUIS UCHITELLE

he job market finally showed some life in September, but not enough to
sidetrack a growing debate over why employment has failed to rebound
nearly two years after the last recession ended. The debate intrudes
increasingly on election politics, but in all the heated back and
forth, an essential statistic is missing: the number of jobs that would
exist in the United States today if so many had not escaped abroad.

The Labor Department, in its numerous surveys of employers and
employees, has never tried to calculate this trade-off. But the
"offshoring" of work has become so noticeable lately that experts in
the private sector are now trying to quantify it.

By these initial estimates, at least 15 percent of the 2.81 million
jobs lost in America since the decline began have reappeared overseas.
Productivity improvements at home sustaining output with fewer workers

account for the great bulk of the job loss. But the estimates being

made suggest that the work sent overseas has been enough to raise the
unemployment rate by four-tenths of a percentage point or more, to the
present 6.1 percent.

That leakage fuels the political debate. The Bush administration is
pushing the Chinese to allow their currency to rise in value, thus
increasing the dollar value of wages in that country, a deterrent to
locating work abroad. The Democrats agree, but some also call for trade
restrictions, and they attack Republicans for cutting from the budget
funds to retrain and support laid-off workers in the United States.

While most of the lost jobs are in manufacturing or in telephone call
centers, lately the work sent abroad has climbed way up the skills
ladder to include workers like aeronautical engineers, software
designers and stock analysts as China, Russia and India, with big
stocks of educated workers, merge rapidly into the global labor market.

"All of a sudden you have a huge influx of skilled people; that is a
very disruptive process," said Craig R. Barrett, chief executive of
Intel, the computer chip manufacturer.

Intel itself has maintained a fairly steady 60 percent of its employees
in the United States. But in the past year or so, it has added 1,000
software engineers in China and India, doing work that in the past
might have been done by people hired in the United States. "To be
competitive, we have to move up the skill chain overseas," Mr. Barrett
said.

The trade-off in jobs is not one for one. The work done here by one
person often requires two or three less-efficient workers overseas.
Even so, given the very low wages, the total saving for an American
company can be as much 50 percent for each job shifted, even allowing
for the extra cost of transportation, communication and other expenses
that would not be needed if the work was done in the United States.
That is the message of the nation's management consultants, who are
encouraging their corporate clients to take advantage of the
multiplying opportunities overseas.

" `Encourage' is a difficult way to put it," said Harold Sirkin, a
senior vice president at the Boston Consulting Group. "What we are
basically saying is that if your competitors are doing this, you will
be at a disadvantage if you don't do it too."

The estimates of job loss from offshoring are all over the lot. They
are back-of-the-envelope calculations at best, inferred from trade data
and assumptions about the number of American workers needed to produce
goods and services now coming from abroad, or no longer exported to a
growing consumer market in, say, China.

Among economists and researchers, the high-end estimate comes from Mark
Zandi, chief economist at Economy.com, who calculates that 995,000 jobs
have been lost overseas since the last recession began in March 2001.
That is 35 percent of the total decline in employment since then. While
most of the loss is in manufacturing, about 15 percent is among
college-trained professionals.

Boeing, for example, employs engineers at a design center in Moscow,
while having shrunk its engineering staff in Seattle. Morgan Stanley,
the investment firm, is adding jobs in Bombay, but not in New York
employing Indian engineers as well as analysts who collect corporate
data and scrutinize balance sheets for stock market specialists in New
York.

Near the low end of the job-loss estimates sit John McCarthy, research
analyst at Forrester Research Inc., and Nariman Behravesh, chief
economist at Global Insights. For them the loss is 500,000 to 600,000
jobs over the past 30 months, again mostly in manufacturing with Mr.
McCarthy suggesting that the 600,000 might turn out to be 800,000. His
research focuses more on the future: Starting in January 2000 and
running through 2015, globalization of American production will have
eliminated 3.3 million jobs at home, he estimates.

Some are trying niche estimates. Roshi Sood, a government analyst at
the Gartner Group, for example, estimates roughly that state government
cutbacks have pushed overseas the work of 3,400 people once employed in
the United States, either on public payrolls or on the payrolls of
companies that contract with state government.

In Indiana, for example, the Department of Workforce Development
recently chose an Indian company, TCS America, to maintain and update
its computer programs, using high-speed telecommunications to carry out
the contract. The TCS bid was $8 million below those submitted by two
American competitors, Mr. Sood said.

Now political groups are offering estimates. The Progressive Policy
Institute, which is affiliated with the Democratic Party, will soon
publish its calculation of manufacturing jobs shifted overseas since
George W. Bush took office just before the recession began, said Rob
Atkinson, a vice president. Not surprisingly, the estimate imputed
from trade data is on the high side: 800,000 jobs lost to overseas
production.

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