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US IT outfits slice 34,800 jobs

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Stateside IT suppliers jettisoned more than 34,000 jobs last month, according to new research.

Since the economic meltdown hit last summer, El Reg has been tracking the monthly jobs report put out by the U.S. Department of Labor's Bureau of Labor Statistics, looking at the overall jobs picture and trying to peel apart the IT-related portions of the report to get a sense of how the tech economy is being affected. The TechServe Alliance does its own analysis of the report, adding in things like wholesale and retail distribution, to get what is probably a better reckoning of employment at IT suppliers in the country.

TechServe Alliance, which was founded in 1987, was previously known as the National Association of Computer Consultant Businesses. The organization has been broadening its scope beyond advocating for computer brokers and dealers and independent consultants of the past several years. Hence the name change in April of this year.

By TechServe Alliance's reckoning, the operations of IT suppliers located in the United States shed some 34,800 jobs in May, bringing the total number of employees at IT companies down to 3,849,100. That is a 3.51 per cent decline since May 2008, and it comes on the heels of 24,500 job cuts in April of this year. Despite the fact that the recession started in the United States in December 2007, employment at PC, server, chip, other IT manufacturers, software makers, IT consultancies, and resellers was flat or climbing though 2008, peaking at over 4 million jobs in September, taking a small hit in October, and returning to the peak in November. Then the air started to come out.

The bleed in jobs at IT makers has been fairly steady since December and accelerated a bit in May even as the overall rate of job cuts in the economy slowed. But TechServe doesn't want employees at IT companies to get too nervous.

"Given that improvement in employment typically lags other economic indicators, the continued decline in IT employment was expected," explained Mark Roberts, chief executive officer at TechServe Alliance in a statement accompanying its rejiggering of the BLS report. "Despite the generally gloomy IT jobs report, survey data and anecdotal reports from our member companies appear to suggest that there is some stabilization in the IT employment picture."

As previously reported, the BLS said that the US economy shed 345,000 jobs in total in May, leaving 132.2 million people employed in the country and giving the US an unemployment rate of 9.4 percent. The job losses were not as deep as many expected, and people are hoping for a slowing of the pace of job cuts again in July too.

Since May 2008, the US economy has lost 5.37 million jobs (these are seasonally adjusted figures and include all non-farm workers). When you do the math as TechServe Alliance has done, the IT vendor community in the States has shed 3.51 per cent of its workforce over that time, but the overall economy has shed 3.9 per cent of its workers. IT seems to be doing a smidgen better, but that is not much consolation of your employer has let you go.

What no one seems to be doing is actually tracking employment in the IT community, which is spread across all industries. The Department of Labor should be thinking in terms of job types as well as jobs in industries, as I have said many times since the meltdown began. To make career choices, people need to know what kinds of jobs are growing and which ones are shrinking and what compensation they are offer. An economy is only as smart of the data it gathers about itself, and BLS is only doing half the job. ®

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