The chaos witnessed over the last two weeks in the financial sector—and the resulting bailout brouhaha—sent shockwaves on Wall Street and consumers throughout the country. Money markets slowed. Stock markets plunged. Combine these headlines with rising fuel prices and rapid job loss and the question of whether or not we’re in a recession seems pretty much answered.
As for job loss, Chicago-based corporate consultant Challenger, Gray & Christmas says firing announcements rose by more than 20,000 in September compared to the same month last year.
Wow. Seems like the IT industry could be facing some serious trouble. In fact, Bloomberg reports computer companies “led industries in announced reductions” in September with 25,715. Computer companies’ planned cuts even surpassed the troubled auto industry (14,595) and financial sector (8,244).
But wait a minute. Of those 25,715 planned computer company job cuts, 24,600 came from ONE company—the troubled Hewlett-Packard. That’s roughly 96 percent from a single source. When you say “computer companies nationwide are planning to reduce 1,115 positions” it sounds pretty minor, doesn’t it?
Then there’s the tech-heavy NASDAQ index. It dropped 200 points last Monday! However, a better examination of the NASDAQ would be to compare dates before talks of the bailout. When you compare Sept. 26 of this year with the same day in 2006, the NASDAQ dropped only 78 points. Comparing Sept. 11 with the same day two years ago, it rose 85 points.
Our economy is clearly in a downturn. And the IT market will undoubtedly be affected. But IT, compared to other industries, is still in pretty good shape. As we’ve written about before, companies are still overwhelmingly planning to spend more on technologies such as virtualization and virtualization management. These technologies, IT managers are starting to see, help save money by reducing infrastructure and minimizing manual troubleshooting.
These benefits are even sweeter during a downturn. Or even a recession.
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