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Decoding the Tech-Job-Loss Reports

A new survey on the phenomenon of "de-skilling" - or replacing humans with automation or robots - as well as a new report detailing losses in the tech industry combine to paint a bleak picture of the state of hiring. But is it an accurate one?

Tuesday, August 12, 2014
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Serial entrepreneur and technology visionary Elon Musk (of PayPal, SpaceX and Tesla Motors fame) recently announced that href="">artificial intelligence could be more dangerous to humanity than nuclear weapons. Think Terminator, The Matrix or your favorite killer robot science fiction. Although we hopefully are years away from that reality, robots may already be getting a mechanical leg up on humanity in the workplace.

Approximately one-fifth of employers in a recent CareerBuilder survey of 2,188 hiring managers and human resource professionals revealed they had "deskilled" their organizations' workforces - i.e., cut jobs because of data automation, the Internet and other technological advances. And a recent announcement from Challenger, Gray & Christmas found that tech-sector job cuts increased 68 percent in the first half of 2014, compared with the same period last year. Yet these two reports, it turns out, do not point to the same trend, nor should they be taken in an all negative light.

It is true information technology firms were top respondents in the CareerBuilder survey when it came to de-skilling; they were twice as likely as all employers to say they were doing it (at 42 percent)."Tech firms are a bit more comfortable playing in this space," says Rosemary Haefner, vice president of human resources at CareerBuilder in Chicago.

But for John Challenger, CEO of the Chicago-based Challenger, Gray & Christmas outplacement firm, the 48,402 job cuts announced by tech firms in first-half of 2014 -- as well as the 18,000 announced in July by Microsoft -- amount to more strategic shifts in the sector. Hewlett-Packard Co. is planning 16,000 job cuts, Intel announced 6,350, LivingSocial 1,500, Texas Instruments 1,100 and Dell 1,000, to name some of the bigger names. These cuts may represent a firm's efforts to pivot toward a world powered more by mobile computing than desktops, according to Challenger. In Microsoft's case, the company is adjusting to its recently announced acquisition of Nokia rather than de-skilling, per se. Challenger says that, in most other industries, big companies wait until a recession to make evolutionary jumps away from old businesses.

But not in the tech industry.

"The technology sector," says Challenger, "has a different clock, it revolves around the sun at a faster speed than the economy does."

He adds that automation is a long-term force that does act, in particular, on the tech job market, although it is not the driver in the short-term losses his firm reported on.

Jay Doherty, a Richmond, Va.-based partner in the workforce analysis and planning practice at Mercer, agrees that automation isn't a new trend -- that it is a longer-term factor like outsourcing. He calls it a "skill shift" in the workplace, whereby lower paying, less-skilled work is being taken over by technology, opening up new opportunities for higher skilled, higher paying positions. It helps explain why employers nowadays are often heard grumbling about their need for skilled workers despite the relatively high U.S. unemployment rate.

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And it brings us to the good news: that 68 percent of CareerBuilder respondents that said they de-skilled also said that that very deskilling resulted in new positions; 35 percent reported that this resulted in more jobs than prior to de-skilling.

"[We were] pleasantly surprised that companies are today out there not just replacing the roles they had before," Haefner says. "What they're doing, they're being smart about advancing their companies for the future."

The CareerBuilder research (launched to investigate this skills gap, says Haefner) demonstrates employers are apparently doing more than just grumbling about needing higher-skilled workers.

"This is not just a short-term feel-good story," she says.

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