With 10,500 employees being cut from Intel’s payroll during the next year,
one question facing both employees and employers is whether the tech market will
be vibrant enough to absorb them all.
Early this month, Intel announced it would eliminate about 10 percent of its
workforce by mid-2007. The company said the job cuts would come from attrition,
workforce reductions and the already announced sale of businesses. Analysts
expect that attrition will account for as many as half of the total.
Intel said workforce cutbacks would come from management, marketing and IT
functions, but gave no indication on the relative allocation. The announcement
came the same day that the Tech Sector Index, published by Forrester Research
and the Information Technology Association of America, announced a mixed outlook
for technology for the fourth quarter of 2006 and beyond.
With virtually full employment within IT today, the market that IT job
seekers will encounter beyond the third quarter of 2006 should be a "good"
market, rather than today’s "very good" market, according to Andrew Bartels, an
analyst at Forrester Research.
"We’re not talking about negative growth, but a slowing of growth," he says.
"What that most likely means is not job cuts, but a reduced rate of hiring,
especially on the IT department side."
The Forrester/ITAA index stands at or near a four-year high. However, its
forward-looking indicators point to only modest growth in the third quarter and
weakening results for the fourth quarter and beyond.
The IT Employment Index published September 1 by the National Association of
Computer Consultant Businesses shows a 4.3 percent increase in IT jobs during
the past 12 months and sizes the national IT market at 3.66 million jobs.
"In a market of this size, several thousand jobs should not have an
appreciable impact," says Mark Roberts, the association’s CEO.
Job prospects will likely depend on the particular area of expertise. The IT
Employment Index indicates virtually no unemployment within certain skill sets,
including computer hardware and software engineers, programmers and network and
computer systems administrators.
"Chip manufacturers trade people all the time," says Joel Passen, COO of
Gravity, a San Francisco-based recruiting firm that specializes in the IT
sector. "But people at the middle-management to director level may have a harder
time finding jobs."
In part, it’s because midsize companies have fewer positions at that level,
and in part because of the culture of hiring for a narrowly specific experience.
"In Silicon Valley, especially in product marketing positions, companies want
to hire people with that domain experience," Passen says.
—Suzanne Young
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