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Fewer pink slips for techies

Government report also suggests that offshore outsourcing played just a small role in mass layoffs in the fourth quarter.

Large-scale layoffs, prevalent in the technology industry since the dot-com implosion, are scaling back.

So indicates a fourth-quarter U.S. Department of Labor report released Wednesday. The study also suggests that offshore outsourcing--widely blamed for tech-related layoffs and other potential economic problems in recent months--accounted for just a small fraction of major, extended layoffs in the United States last year.

In the three months ended Dec. 31 of last year, 7,857 workers in the IT industry lost their jobs as part of "extended mass layoffs," down significantly from 15,318 a year earlier. That compares with 236,637 such layoffs in all sectors, down from 325,333 in the fourth quarter of 2003.

An extended mass layoff, in Labor Department terms: 50 or more people from one company file claims for unemployment insurance over a five-week period, and at least 50 in that group remain unemployed for more than 30 days.

The report dovetails with a study by an employment services company finding that tech companies gave out 23 percent fewer pink slips last year than they did in 2003. Another encouraging sign for tech workers is that 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 in 2004, according to Labor Department data.

On the other hand, a new wave of mergers in the tech world is translating into thousands more job cuts. Salaries for technology professionals in the United States fell 2.6 percent in 2004 to an average of $67,800, according to a study from job board Dice. And there's also the threat that tech work will be sent overseas.

The new Labor Department report suggests, though, that offshoring had a minimal effect on extended mass layoffs last year. There were 16,073 of those cases, representing just 3 percent of all extended mass layoffs unassociated with seasonal factors or vacations, the report said.

Those figures, however, are not exhaustive. The Labor Department did not receive complete information for all instances when employers moved work as part of an extended mass layoff. The report also excludes such layoffs of fewer than 50 people.

John McCarthy, a prominent offshoring analyst at Forrester Research, has argued that much offshore-outsourcing activity probably involves U.S. job cuts of fewer than 50 workers.