Tech layoffs looming

Early on in the economic collapse in which we currently find ourselves, there was some optimism that the tech industry would weather the downturn well. And indeed, there have been some areas of opportunity which persist, but according to Sam Diaz's blog on ZDnet, last year the tech industry took a hit. nearly 187,000 jobs were lost in the telecommunications, computer and electronic sectors, and it's likely that 2009 will not be any better. Of course it could be worse, we could be manufacturing RVs that nobody wants to buy any more. At least in many segments of the IT business, what's on offer is non-negotiable, and essential for continuation of business. Nonetheless, we've seen some pretty big layoffs, most recently from Microsoft.

The ZDnet blog referenced above also notes that unemployment in Silicon Valley is at 7.7 percent, a half percentage point higher than the national average. This is a shock. I remember being in Silicon Valley during its heyday, and at that time, all you had to do was roll into town wearing a pocket protector and looking like a geek, and you'd be employed the next day.

Ultimately, I think there is going to be a shift in the IT business; there will be layoffs, but there will be other areas of growth. PC manufacturers may be shrinking, but at the same time we're going to see growth simply as a result of shifting corporate priorities. Corporations are going to be laying off their own internal IT staff, and service firms are going to have to pick up the slack. Companies won't want to make capital investments, so hardware companies will shrink and companies offering virtualization solutions will grow. Now more than ever, it's just a matter of being in the right place.

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