Is the tech recession over?

http://www.joelonsoftware.com/items/2009/02/11.html

by rayvega • 17 years ago

29 33 17 years ago

joelonsoftware.com

z3r0p4r4d0x• 17 years ago

Never knew recessions are indicated using Joel Spolsky's product sales.

ConradHex3• 17 years ago

From the article:

"OK, it’s just one data point. All I know is sales of FogBugz and Copilot."

"This could be a fluke; it might not reflect any reality."

I think it's very informative for them to share (relative) sales numbers like this.

thinkcomp• 17 years ago

No.

tptacek2• 17 years ago

No. Most of the drama hit in September, 2008. It takes an F500 significantly more than one month to react to the downturn. In our case, we predicted we'd see budget contractions and RIF's in Q1-Q2 as '09 budgets were slashed and revenue recognition results started bleeding into companies, and that's roughly what we're seeing.

illumen2• 17 years ago

So your answer is Yes, but soon it will be No?

tptacek2• 17 years ago

I don't want to get too specific, but we're already seeing signs of cost-cutting --- particularly hiring freezes and loss of open headcount, and in sharp capex restrictions. There's no "Yes" interpretation, since we're saying the bad stuff hasn't really started happening yet.

To believe that a tech recession peaked in September and is now past us, don't you have to believe that thousands of massive companies absorbed the Lehman Brothers and AIG shock nearly instantly?

illumen2• 17 years ago

Is the tech recession over? In AU, and UK... Yes. According to various job places, there has been an increase in jobs. A low point was of course September, and October... but things have increased since then. Even newspaper classifies for jobs are on the up. Also the number of client requests for new projects has gone up for software developers/designers/advertisers/marketers I know.

I don't really track USA places - so I can't comment on them.

Is this Joel on Software post another thinly veiled advertisement for their services? Yes.

potatolicious• 17 years ago

It's not fully over I don't think. I'm graduating from college in a few months and most of my peers have had a lot of trouble finding jobs. It's gotten so bad that even now employer recruiting sessions (the few that still come to campus) are packed to the brim with desperate job-seekers.

So while the catastrophic part is over, we're still not quite up to normal yet.

On the flip side, a lot of my peers are also still holding out for highly-paid positions at financial firms and consultancies (these are engineering majors). Both are suffering worse than the rest of 'em...

tomsaffell• 17 years ago

Hang in there. Graduate recruiting is cyclical and has lag, which are combining right now to make for tough conditions for milk-round applicants. If you dont get what you want now then start targeting the off cycle recruiting processes as as soon as you hear of their markets picking up. Once these companies see conditions improving they will be scrambling to hire all the people that they were no-so-long-ago scared to hire...

(Companies doing milkround recruiting (i.e. large companies, including consultancies and banks) typically set their targets for # of hires in advance of milkround cycle starting. (In my experience, this would mean setting numbers in September for the cycle that is 'on campus' in Dec-Feb). So it's no wonder they are down - they set numbers when everyone was very scared.)

ConradHex3• 17 years ago

> Is this Joel on Software post another thinly veiled advertisement for their services? Yes.

It was also informative, at least to me. When JoS stops being informative and/or entertaining, I'll stop reading it. There's no sign of that happening, though.

beamso• 17 years ago

In AU I'm seeing less jobs advertised on Seek than late last year.

whatusername• 17 years ago

http://business.theage.com.au/business/surprise-jobs-jump-20... "Employers took on an additional 33,700 full-time employees in January, the most in six months, spurring hopes the economy may yet avoid a recession.

All up, the economy added 1200 jobs last month as firms cut part-time jobs. Even so, the result was much better than the overall 18,000 job losses economists had tipped."

jwilliams• 17 years ago

In AU at least two major banks (CommBank and NAB - w/ SAP and Oracle respectively) are undertaking major core system replacements - this is driving up the local tech markets.

angstrom• 17 years ago

I think the examined time frame needs to be wider. I've always noticed an upswing in hiring after the November/December holidays.

hendler• 17 years ago

Here in the US I think the blue chip tech firms have to fight for their lives. Infrastructure (Cisco, Intel) and the best positioned for supporting open source (Canonical, Fog Creek), I feel, will survive. I think data supports this.

Companies that support smaller tech operations (and hackers have always known are more efficient) should continue to grow. The recession may never happen for some.

llimllib2• 17 years ago

hmmm... what would be weird would be if people tended to exhibit herd behavior, and go to the restaurants that have the most people because they must be the best ones.

If that were the case, Joel would have a financial incentive to claim that people were buying his software just as much today. I mean, especially if he were super savvy at marketing his software on his blog. hmm...

herval• 17 years ago

But isn't that exactly the way people behave0?

ConradHex3• 17 years ago

Could be. Or maybe he's just telling the truth. Do you have evidence of Joel being dishonest before? His blog doesn't feel like it is, to me.

llimllib2• 17 years ago

I didn't claim that he wasn't telling the truth.

sown• 17 years ago

I think that anything that would save money would be OK. I work for a certain, very large SaaS company that saves companies on certain expenses (for real!) and we've seem to seen an uptick in business.

psadauskas2• 17 years ago

It never really happened here (Boulder, CO). A couple of the big guys with offices here (Sun, IBM) laid off a few hundred, and all the engineers and tech guys were snatched up immediately. We've been looking to hire for 6 months, and have yet to find any decent candidates in the area.

There's lots of startups here always hiring, and large government labs to fall back on.

rrival• 17 years ago

Were you in Denver/Boulder in 2003?

psadauskas2• 17 years ago

No, I moved here in 2006.

tristian• 17 years ago

This could be an attempt by companies to become more efficient by replacing positions in HR and Support with software solutions.

So while this might be representative of the SaaS industry I strongly doubt that it would represent the tech situation as a whole.

Actually I think the tech sector is going to be slowly winding down for quite a while to come. There were lots of big contracts locked in before the recession hit, and that existing work is going be finished off over the next year without much to replace it.

ardit33• 17 years ago

Yes. Well, at least the panic is over, and some companies are hiring cautiously.

I got three job inquiries last two days, from recruiters and: I got another request from a startup that I got an offer in October, that week that Sequoia send the RIP presentation. They had to withdraw the offer, b/c of a hiring freeze mandated by the board. It seems that they are hiring again, and contacted me if I was still available.

I am not, as I found a new job in a same size startup.

Basically, if you are really good, you will be able to find a job. I might take some time, but there is some hiring going on. The only thing is that there is a lot of people laid off, so there is a lot of competition out there, and some interviews will end up like an "american idol" contest, but be patient and don't get discouraged.

In another anecdote, mobile seems to be a field that is still hiring. A friend of mine was laid off in December, but he was able to find contracting work within 3-4 weeks.

I think this recession will probably drive some subpar talent out of the industry, which I think it is a good thing.

mtkd• 17 years ago

It has hardly even started yet.

Many tech companies have been insulated as they were funded (therefore not relying on revenue for survival).

There will be no new funds for many of these companies - so they need revenue - and they have to achieve revenue in a contracting economy.

I had hoped we'd see an uptick in activity in H2 2009, but I fear it's going to 2010 or 2011 before we start to see real recovery - the history of the 1930s indicates it may be even later than that. Many economists are saying comparisons with 1930s are wrong, which could be true, but in the 1930s the economies outside the US were unaffected and exports to those economies dragged the US out of depression - this time it's global.

It's possible we will see some fake recoveries, some may last a year or so, but the problems this time are so vast it's going to take many years to heal.

These massive spending measures that are being put in place all have consequences and we've got to deal with those before we get back to stable growth.

Some companies, for instance those doing business apps that save money, will be counter cyclical and may do well. For the rest it's going to be hard times.

bwd• 17 years ago

"...in the 1930s the economies outside the US were unaffected"

Perhaps you should read the Wikipedia article on the great depression paying careful attention to the section on effects: http://en.wikipedia.org/wiki/The_great_depression#Effects.

"...and exports to those economies dragged the US out of depression"

If by "exports" you mean all the bullets and bombs and tanks and so forth that the US sent out to blow up everybody else's stuff, then I agree with this statement. You also need to include all the stuff that was then sent over to rebuild that blown up stuff to account for why the depression didn't continue after the war was over.

On the other hand, I heartily agree with your statement that today's problems are vast and that it may take years to heal. It's going to be painful to reduce production now that people will not be able to continue to borrow to fund lifestyles that are beyond their means. It will be even more painful when everybody figures out that the government can't do the same.

bd• 17 years ago

I have some more datapoints from jobs aggregated on Joblighted (24 sites):

http://joblighted.com/statistics

There were indeed more jobs posted in January 2009. Though probably much of this increase is cyclical. In two previous years there was the same pattern - a decline in December followed by an increase in January.

http://joblighted.com/img/jobs_Sep2006_Feb2009_monthly.png

http://joblighted.com/img/jobs_Sep2006_Feb2009_weekly.png

(Please note that I kept adding job sites, which could hide some of the decline in job postings).

tallanvor• 17 years ago

No, at least I do not believe the recession is over in the tech industry, but some companies are better positioned than others to do well right now.

Companies like Fog Creek could actually do very well, because people buy their products to streamline processes and improve productivity. --Exactly what companies need when they lay people off or slow hiring.

While we're doing better than most other industries, we've still seen more jobs lost due to the economy than new jobs being posted. I do agree, though, that the really good people will generally still be able to find work, although not necessarily as quickly as they once would have.

bmj• 17 years ago

We weathered a nearly four quarter long downturn that ended in Q3 of 2008. Sales have been brisk since, and the pipeline looks good. We haven't attempted to fill positions that were removed during that downturn, however.

Other tech companies in the area are hiring, though certainly not at the brisk rate they once were. The only active layoffs I've heard about are in the financial sector.

adamc• 17 years ago

I don't think it is over, because many organizations are only starting to cut back. Not everybody was hurt initially, but the effects are gradually spreading throughout the economy. It seems likely that this will result in a drop of IT spending.

Certain products may do well, though, if they look likely to save companies money. Maybe that's what happened to Joel.

nihilocrat• 17 years ago

Yeah, I tend to spend all my days in code and thus don't have a clear idea of how the video game industry is doing, but I haven't heard anything about people lifting their hiring freezes, and it seems like there's a new studio that shuts down or cuts jobs every few weeks.

geebee• 17 years ago

My initial reaction would be "of course not". When the rest of the economy is in a tailspin, why would tech somehow be different?

But here's the thing - we (the tech world) took a brutal recession in the early 2000s to shake off the excesses of the dot com bubble. Many people believe that Fed managed to avoid the dot com bubble reckoning by creating a new, and even more dangerous, bubble in housing.

It did seem that way. While hundreds of thousands of people (including good programmers) lost their jobs, housing prices kept climbing, and consumer spending kept humming along, even increasing.

So in some ways, I wonder if maybe the rest of the economy is experiencing the reckoning that tech has already been through.

I have trouble believing that high tech won't be negatively affected by the economic troubles, but it may be much better off than other sectors of the economy.

Is the tech recession over?

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