Monday, September 22, 2008

Tech firms fare better than most in jobs slump

Tech firms fare better than most in jobs slump - Nation and World: AP Article
Automakers and housing-related manufacturers were among those losing the most jobs during the month, while education, health and government saw job gains. But unlike in 2001, when a bust in the technology sector - accompanied by massive layoffs - played a central role in sparking a recession, this time around the industry is more insulated.
The article does have some valid points. But, I wonder how outsourcing will fare against the recent collapses. I know for a fact that Bear Sterns and Meryl Lynch outsourced a good portion of their software development, while companies like Fidelity reigns supreme in the portfolios of some leading outsourced service providers in this region. So the terminated projects will have a direct impact on the job market here.

On the other hand, tight budgets will eventually lead to more outsourcing, in which case there might be a boom, once the initial ripples have calmed down and CIOs start re-evaluating their strategies. Therefore less growth seems to be the order of the day for the moment, even for the outsourced service providers. But it would be wise for these companies to preserve their key staff for an eventual pick-up in business.