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Technology firms least affected by slowdown
By siliconindia
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Wednesday, 10 September 2008, 16:27 IST
Washington: Technology appears to be one of the sectors that were least hit in an economy beset by unemployment at a five-year high, reported Business Week.
According to a Labor Department report, companies slashed their payrolls by 84,000 jobs last month, sending unemployment rate in the U.S. to 6.1 percent from 5.7 percent in July.
Among the top job losing sectors were automakers and housing-related manufacturers. Meanwhile, education, health and government sectors saw job gains. But the information technology industry remained more insulated.
"Overall technology employment is up in America and the wages associated with it are up," said John McCarthy, a vice president with Forrester Research.
Payrolls of computer and electronics manufacturers grew by 5,100 from July to August, according to the Labor Department's data. The work forces of computer-systems, designers and related services providers increased by 6,300.
But McCarthy says that the trend does not mean that industry is immune to a downturn. The technology sector has matured, which means it is becoming more susceptible to the ups and downs of the economy. Even rapidly growing companies like Internet search leader Google are becoming more cautious as the economy crumbles. During the spring, Google added 448 workers, the fewest employees it had hired in a three-month period since the final quarter of 2004.
Within the technology sector, software vendors - whose products can help other companies automate processes and save money in downturns - have held up particularly well so far, said Andrew Bartels, a Forrester vice president. And large U.S. based companies have been able to offset weakness domestically with solid growth overseas.
However, in general, technology companies are experiencing a slowing of growth, but not an overall decline in business. In such a case, Bartels said, one of the things companies try to protect is their staff.
