Has tech employment turned a corner?

The U.S. tech industry lost 25,000 jobs in 2004. The good news: It may have hit bottom, a study says.

Ed Frauenheim Former Staff Writer, News
Ed Frauenheim covers employment trends, specializing in outsourcing, training and pay issues.
Ed Frauenheim
2 min read
The U.S. tech industry may have reached the bottom of the trough when it comes to employment.

That's the implication of a study released Tuesday by the American Electronics Association, which found that the country's high-tech industry shed 25,300 jobs in 2004, to 5.6 million. By comparison, 333,000 tech industry jobs were lost in 2003 and 612,000 in 2002, according to the trade group.

"The good news is that the technology industry looks to have turned a corner," the association's president, William Archey, said in a statement.

The report adds to mixed signals about the employment scene for tech professionals, who weathered severe job losses earlier this decade amid the dot-com bust.

A recent survey showed that information technology workers' confidence in the employment market rose in March. In addition, the average number of unemployed workers in nine high-tech categories--including computer programmers, database administrators and computer hardware engineers--fell from 210,000 in 2003 to 146,000 last year, according to Labor Department data.

On the gloomier side, technology companies have been slashing jobs at a rapid pace. In addition, tech professionals face the possibility of their jobs being sent to lower-wage nations such as India or China. The automation of technology tasks is also a threat.

According to the AEA report, the software services industry added 30,300 jobs last year, and the engineering and technology services industry produced the same number. But electronics manufacturing shed 31,900 jobs, and the communications services industry lost 54,000 positions.

Various types of employees at high-tech companies, including executives, supervisory personnel, professionals and clerical workers, are captured in the association's job statistics, which are based on federal data.

According to the report, California remained the top "cyberstate" in 2003, the latest year for which state-level employment data was available. The Golden State shed 67,800 technology industry jobs that year, to 915,500. Texas ranked second, with 446,000 tech jobs, down 32,900 from the preceding year.

AEA's Archey tempered the good news about the decline in tech job losses with a warning about the country's status as a technology leader.

"We need to be aware of increased challenges to our lead in science and technology as competition from the rest of the world intensifies," Archey said in a statement. "We need to pay particular attention to the factors that drive technology innovation, primarily a highly educated and skilled work force and research and development."