Job Cuts in IT Down: Pay for Non-Certified Skills on the Rise

Workforce reductions in IT are down 19 percent over last year.

By Todd R. Weiss
Thu, October 18, 2007

Computerworld — If you're looking for a new job in IT, keep in mind two trends: technology job cuts are at the lowest level of the year and—for the first time ever—pay for noncertified IT workers now averages more than pay for workers with IT certifications.

The upshot: It may be a good time to land an IT job, and workers with real-world experience are less likely nowadays to take a pay hit just because they lack certification.

Those are the conclusions of two separate studies conducted by Chicago-based global outplacement firm Challenger, Gray & Christmas Inc. and by Foote Partners LLC, a Vero Beach, Fla.-based IT workforce research consultancy.

The Challenger report found that tech-sector job cuts in the third quarter totaled 26,242, down 19 percent from the 32,494 IT job cuts in the previous quarter. The Q3 figures represent the lowest level of IT job cuts so far in 2007, according to Challenger, and was concentrated among telecommunications and computer businesses.

Despite that upbeat picture, Challenger reported a surge in job cuts in the electronics industry for the second consecutive month, "which could ignite concerns about the future health of the entire technology sector," according to the report. Electronics firms announced 21,271 job cuts in the quarter, the report said, up 127 percent from the 9,350 job cuts in the previous quarter. That second quarter total itself was up 95 percent from the 4,788 electronics industry job cuts in the first quarter.

"What we've been seeing was that computer and telecom industry cuts used to be bigger," said James Pedderson, a spokesman for Challenger. "But now we're seeing cuts in components, especially semiconductors," which could presage coming job cuts in IT businesses that use such components.

Job cuts in the overall technology sector totaled 90,577 through the third quarter, a 24 percent decline from the same period in 2006, when tech-sector cuts totaled 119,562. "The worry is that the job cuts in the electronics industry represent the canary in the coal mine warning us of bigger problems ahead, " John Challenger, CEO of Challenger, said in a statement. "After all, this industry provides many of the materials and components that go into computers, cell phones and other technology products."

As for the Foote Partners quarterly IT Skills and Certifications Pay Index report, it reported that pay scales for non-certified IT skills exceeded the pay rates for certified skills for the first time in eight years. The index, which monitors the pay of about 74,000 IT professionals in the U.S. and Canada, has been showing evidence of that trend for some time.

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