Tech Jobs Took a Big Hit Last Year (fortune.com)

Barb Darrow, writing for Fortune: Tech jobs took it on the chin last year. Layoffs at computer, electronics, and telecommunications companies were up 21 percent to 96,017 jobs cut in 2016, compared to 79,315 the prior year. Tech layoffs accounted for 18 percent of the total 526,915 U.S. job cuts announced in 2016, according to Challenger, Gray & Christmas, a global outplacement firm based in Chicago. Of the 2016 total, some 66,821 of the layoffs came from computer companies, up 7% year over year. Challenger attributed much of that increase to cuts made by Dell Technologies, the entity formed by the $63 billion convergence of Dell and EMC. In preparation for that combination, layoffs were instituted across EMC and its constituent companies, including VMware.

Comments

Leading Indicator

[sdinfoserv]

The economy cycles every 8-10 years. We're 9 years into a growth phase, it's only natural another recession is coming. Tech workers are a good early indicator. Outside of companies that sell tech, IT is just an expense. An expense that's the last to get hired in good times and the first to get cut in tough times. I in many areas corporate controllers are starting to tighten the check book - frozen hiring in some jobs, halted projects and consolidation are happening. Some industries were waiting for the election to strategic plan the next 36 months. They have it now and are belt tightening. Tech survived before and it will always survive. Be conservative with money and plan for a rainy day. It's the prudent life strategy.

Re:Leading Indicator

[__aaclcg7560]

We're overdue for a recession. However, I don't think Wall Street got the memo yet. Bonds are oversold as everyone and their mother jumped into the stock market. When the bandwagon drives past you, that's when you make a U-turn in the market. I've been buying up oversold bond funds since the election. Looking forward to buying stock shares on the way down after the market crashes.

Re:Leading Indicator

[ctilsie242]

The problem is that since the 1990s, everyone feels the crash. Only a few see the recovery. When the economy tanked in 2000, for a lot of the US, it stayed tanked because the manufacturing jobs and steel mills went overseas. In 2008 when we had the economy crash, tech sector jobs have improved, but in reality, for most other sectors, there has not been that much, if any improvement. If other sectors see it, it is spillover from the tech sector (new BMWs, housing going up), or from other countries buying up land in the US.

I would say the economy peaked last summer, when in June and early July, there were hundreds of DevOps job postings for the local area I am in (Austin, TX). In six weeks, the number of those was reduced by over 90%.

We do have a few bubbles that may pop. First, the only thing that VCs are spending a dime on are companies that either push ads, suck data (analytics), or both. Even cloud computing hit a zenith in the past year where HP left the cloud market, and Rackspace got bought out. The uncertainty about the elections has also shaken people, and that might just have been enough to start an economic slide. To boot, OPEC is back with a vengence, and oil is climbing, which is also a drag on the economy.

Then, there is the final nail in the coffin. The Fed waiting to raise interest rates.

I'm seeing an across the board belt tightening. Public places have hiring freezes. Private companies are looking at technologies like Amazon Lambda [1], serverless technologies, and wholesale, "damn the torpedoes, full speed ahead" moves to AWS. AWS may be more expensive, but in a lot of PHB's heads, even if it costs more, reducing headcount is more important, because of the immediate cost savings.

I think as uncertainty goes on and it goes to outright unrest, the economy is going to not fare well. Especially with so many people disliking the current administration and are willing to monkeywrench to see that it doesn't do well.

[1]: The main attraction for Amazon Lambda is that companies can fire their OS, DBAs, and hardware guys, and just have someone doing IAM as the "IT department" with devs doing everything else.

Re:Leading Indicator

[sdinfoserv]

Yes, which is why so many prepers are stocking beans, rice and bullets. The fed has been artificially keeping the economy alive with unrealistically low interest rates and silly QE-# programs. So many jobs have been shoved overseas there's not much room left to work outside of tech, medical and fast food. (programmers, nurses and minimum wage) .
That's where the robot prognosticators fail - it's working people that buy all the crap made by the rich. Throw enough workers out of jobs via automation and there's no $$ to buy the goods and services the rich are trying hock.
Eventually there will be another crash and with interest rates where they are, there's no tools in the fed box to fix it. The GOP is going to have to jump on the Dem band wagon for massive public works project bailouts - huge infrastructure upgrades, bridges, highways and the electric grid will all get billions just to put people to work. Then will be in a place for things like wide scale electric cars and home electrical generation. but not till then.

Yes, the Cloud, but other factors too

[ErichTheRed]

One of the things mentioned is the jobs lost to mergers. When two big companies join up, generally one IT department wins and the other gets thrown in the trash. Dell is in Texas and EMC was in Massachusetts -- I wouldn't be surprised if they just emptied out EMC's offices in one day and sent maybe 2 or 3% of them to Austin. Big companies are the source of a lot of good-paying, middle and upper middle class jobs, and they tend to acquire a lot of people over time. It's inevitable that big clean-outs happen every few years or so. Another huge one the article didn't mention is the HP and HPE demerger, then split-sale of EDS to CSC. That must have been an absolute bloodbath, because I know people who work for the former EDS, HP Services and CSC. All of them are absolutely packed with layers and layers of project managers, account executives, etc. that can hang on for years because customers pay for them. The problem is that big companies have gotten so big that these mass-firings affect an entire industry. What happens when 30,000 people are competing for the same 100 jobs in an area, for example?

And yes, the other thing is the cloud. This one drives me nuts as a systems engineering guy, because the reality is that the cloud just shifts the same issues around in many cases. Your IT guys are not suddenly useless dinosaurs, as some DevOps consultants would have you believe. You still need people with a good grounding in the fundamentals of computing even if you completely rebuild your apps to be RESTful, microservice-y and fully buzzword compliant. Even with access to "infinite" computing resources, you have to deal with new problems like accounting for downtime you can't control, dealing with network latency, huge bills for using services you don't need, and integrating old-world applications with new stuff. The problem is this -- we have tons of people in the systems world who could easily be trained on this stuff. Shifting your focus from managing systems to automating stuff is a big shift, but it's doable; I'm working on it right now. What I'd like to see is the cloud providers work on bringing the IT side of the house into the tent, not just the developers. Microsoft's been doing an OK job with Azure, but they could improve and write documentation that doesn't assume decades of software dev experience. AWS is almost completely focused on developers. I'd write a book, but it would be out of date before it was published. Maybe I should start a video series or something...

What's the net?

[bluefoxlucid]

This is like saying I spent $30,000 last year, so my finances took a big hit. I actually had income, so you know... my debts were paid down, savings were built, and I spent $30,000.

The U.S. Technology Industry surpassed 6.5 million employees in 2014, and 6.7 million in 2015. TFA and TFS say there were 79,000 tech jobs cut in 2015, but there were 200,000 more jobs at the end of 2015 than there were at the end of 2014. Now TFA and TFS say there were 96,000 tech jobs cut in 2016, so I guess we're looking at a job growth of 243,000 in the sector?

Re:Mostly thanks to H1Bs

[Altus]

No, as the summary stated its mostly due to layoffs from large floundering companies... of course this is only about layoffs and doesn't take into account any new hiring which may or may not outpace the layoffs.

Re:oddly

[Altus]

Same in Boston. I had 3 job offers when I was looking back in October and got a very significant raise from my previous position. I remember 2002, this is not a rough job market at all.

Re:Mostly thanks to H1Bs

[GrumpySteen]

Data like the shitload of news stories about how Disney laid off workers and required them to train their H1B replacements or lose their severance pay?

There have been any number of stories that follow the same pattern. It's very easy to find them if you actually look.

The regulations meant to stop companies from replacing workers with H1B workers simply caused the companies to outsource the work to companies that, coincidentally, are staffed almost exclusively with H1B workers.