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It Layoffs: Not as Many as You Think

While a number of high-profile technology companies have recently announced layoffs, the situation may not be as dire as one assumes. The numbers reported by tech industry leaders do not always reflect actual people losing their jobs. Rather, they reflect planned future cutbacks and eliminations of some vacant positions. IT executives have been relatively conservative in their IT spending growth, so when the economy took a downturn last year, they did not have to cut as much as expected. In fact, despite the downbeat economic prognosis, some experts still project that 2009 will bring salary increases for certain IT skills.

As the economic outlook continues to deteriorate, IT vendors are taking necessary action to protect themselves against what they assume will be a weak market in 2009. As a result, January saw a raft of layoff plans from high-profile vendors like no other in the portion of the tech industry that supplies business IT. Even companies that recently reported positive earnings have confirmed layoffs. In January alone, just from the major tech vendors, as many as 35,600 jobs were lost, not counting the thousands of rumored layoffs elsewhere.

However, according to InfoWorld's count of actual layoffs, the number of people who have lost real jobs from these business IT tech vendors is nowhere near 35,000. Instead, it's closer to 9,600. There is a disconnect because announced layoffs aren't always actual layoffs. Instead, they are announcements to shareholders of what needs to be done to reduce costs. The announced numbers include vacant positions and planned positions, so eliminating them doesn't actually result in anyone getting fired. And the announced numbers include layoffs that may occur later, 18 months out. Some companies may be able to reduce headcount by simply not hiring in certain divisions.


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