IT jobs cuts will not help ‘loosen skills bottleneck’

Job cuts in the technology
sector will not tackle its severe skill shortages, a recruitment company has

IT staffing company
Plexian claims that the current round of job cuts, by companies such as Philips,
Ericsson and Cisco, will not release new talent into the job market.

Roy O’Brien, director
of Plexian, said, "The majority of staff being shed is at more junior
levels such as the relatively unskilled helpdesk staff or junior programmers.
The biggest shortage of skills is at the higher end of the skills market."

Restructuring at
Philips, Ericsson and Cisco could make more than 12,000 staff redundant. Many
of these will be staff with outdated skills or low skill levels.

O’Brien said, "A
lot of the redundancies can be seen as cutting back corporate fat. We’ll only
see a significant loosening of the skills bottleneck once companies are forced
to cut more aggressively into healthy bone and muscle.

"We are seeing
some senior staff being released, but not nearly enough to put a dent in
current demand."

Consumer electronics
manufacturer Philips reported a slump in profits of 82 per cent for the first
quarter of 2001. The company warned that the hard times could continue in the
next quarter following the economic slowdown in the US.

There is speculation
that Ericsson could cut 6,000 jobs to tackle profitability, and Cisco issued a
profit warning last week along with plans to lay off 8,500 people.

Other cutbacks in the
TMT sector this year include Intel cutting 5,000 jobs, Nortel announcing 15,000
job cuts and Motorola deciding shed a further 4,000.

O’Brien says the cuts
are unlikely to last long. Research published this month by the IT Association
of America estimates that 900,000 new IT jobs would be created in the US this
year, compared to 1.6 million last year.

By Richard Staines

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