by Art Jahnke

Technology Costs Jobs, Results in Downsizing

Feb 01, 20046 mins
IT Leadership

Remember, not so long ago, when people used to talk about the turnaround in the IT job market that would arrive in the first quarter of 2003? Some of those people are still talking about a first-quarter turnaround, but now they mean the first quarter of 2004. There are many predictions circulating about when the IT job market will rebound and the shape that the industry will take once it emerges from its deep sleep. Although it’s impossible to know what to expect in the future, most are now in agreement that the industry won’t be returning to boom times anytime soon.

In mid-2003, the American Electronics Association released its annual assessment of the high-tech job market, and the news was not good: The technology segment dumped 560,000 high-tech workers in the past two years.

Most of those workers, analysts agree, were dumped for one of two reasons: Their employers could afford to dump them, or their employers could not afford not to dump them.

William T. Archey, president and CEO of the group that sponsored the study, regards the two reasons as two views of the same situation. Archey points out that the lion’s share of jobs lost (415,000 of the 560,000) came from the high-tech manufacturing sector, where businesses have enjoyed the benefits of new technology. One of those benefits, he reminds us, is a reduction in the number of workers needed to meet production demands.

“That’s one of the paradoxes of this whole situation,” says Archey. “Technology has made the manufacturing dramatically more productive. Five years ago it may have taken three people to make a cell phone, and now it takes one.” It’s a paradox that presents a problem, and it’s a problem that appears to have no solution, Archey says.

Is the president of the American Electronics Association right? Will technological progress continue to reduce the need for technology workers? Or can the technology industry save itself from its own success? Got a solution? Tell us what it is.

Sound Off is a weekly online column about current IT-related issues written by Web Editorial Director Art Jahnke. Find the column at

I don’t see why anyone would think that the introduction of new technology would be a threat to technology jobs. Jobs can and will change over time. They do so much faster in the technology field than they do in other fields, but the overall number of jobs only increases as the technology becomes more complex.

Tech professionals have to constantly work on their IT competencies and be willing to continuously upgrade their skills. By that I mean that IT professionals need to develop the people skills that enable them to deliver technology in an understandable manner, and they need to refresh whatever skill sets (programming languages, network knowledge) needed to be useful. I don’t see there ever being more than a very temporary shortage of IT jobs, and then only in a depressed economy or while the individual does a “skills refresh.”

Bernard Doyle

CIO, EDO-AERA Of course there was some irrational exuberance in 2001. But don’t blame IT?technology needn’t eliminate work; it transforms work from routine and repeatable to dynamic and creative. But business leaders have to have the imagination to see that and the willingness to change. Generally they don’t. IT workers are used to change as a way of life. We know that there are many human tasks that are neglected because many managers don’t see the need for strategic change, they don’t support R&D, and they don’t fully utilize the technology that is already available. They only want to maximize quarterly earnings.

Paul Arveson


Balanced Scorecard Institute

I care greatly about my people, but my responsibility is ultimately to the organization I work for. If I cannot justify my staff, they must either retool and move into other positions?or find other jobs. Our goal must be to do more with less.

K. Cassel


Like all new ideas, the movement of I.T. services to offshore locations is viewed adversely, but in fact it is the competitive edge that would help the tech industry in the United States work out of its current situation. Leveraging lower cost of maintenance and manufacturing would enable the tech companies to lower their operational costs, hence prices, and open up a larger global customer base that, to date, has been untapped.

Undeniably, this would require tech workers to advance their skills from executors to designers and managers. Movement up the value chain, like success, requires tenacity?and not all will succeed.

Vivek Khanna



The tech industry is committing suicide. An industry the size of the tech industry could generate its own recovery if the high-tech companies simply bought high-tech themselves. The reality is that executives in high-tech have curtailed spending to the point of committing themselves and the industry to a slow and painful death. It’s amazing to me that the very people complaining about the economic situation are the same ones who could bust things open simply by spending and upgrading technology. With the downfall of the Internet, it seems we went completely belly up, and our inaction will be what kills technology. I have a novel idea: How about all the high-tech companies upgrade their technology now instead of waiting. You know, be leaders and quit aspiring to a norm that won’t change unless they decide to change it. The key is and always will be leadership, and right now, I see no leader willing to be the catalyst to get things moving. Any takers out there?

Bill Long



The tech industry is neither an industry nor is it ruled by technology. It is a loose amalgamation of niche players who are attempting to establish their standards over those of competitors. The measure of success remains market share.

From direct experience, I have concluded that any success this industry has seen has at times been coincidental due to the ingenuity and novelty of the technologies it has introduced during a time of economic expansion. We should not forget that those same high-tech employers that hired and then dumped 560,000 workers during the past two years did so in response to products that would not sell in markets that would not buy.

I have been involved in many senior management meetings with clients and employers during which valid negative risk-assessment reasons for not pursuing a particular market were downplayed due to the sales potential and to the perceived image value to the corporation.

The business maxim used to be, “If you build it, they will come.” Today it has morphed into, “If you do build it, would anyone have the money to risk buying it?”

Anthony Paraskevas

Senior Consultant

Mi6 Marketing Intelligence