Tech firms fare better than most in jobs slump

The Labor Department reported Friday that companies slashed their payrolls by 84,000 jobs last month, sending the country's unemployment rate to 6.1 percent from 5.7 percent in July.

Automakers and housing-related manufacturers were among those losing the most jobs during the month, while education, health and government saw job gains. But unlike in 2001, when a bust in the technology sector--accompanied by massive layoffs--played a central role in sparking a recession, this time around the industry is more insulated.

"Overall technology employment is up in America and the wages associated with it are up," said John McCarthy, a vice president with Forrester Research.

In a few corners of the high-tech world, the results were strong: Payrolls of computer and electronics manufacturers grew by 5,100 from July to August, according to the Labor Department's data. The work forces of computer-systems designers and related services providers increased by 6,300.

This is not to say the industry is immune to a downturn, McCarthy said, as it seemed to be in its early years, starting in the 1970s through the 1990s. The technology sector has matured, which means it is becoming more susceptible to the ups and downs of the economy.

For example, even rapidly growing companies like Internet search leader Google Inc. are becoming more cautious as the economy crumbles. During the spring, Google added 448 workers, the fewest employees it had hired in a three-month period since the final quarter of 2004.

But management has indicated the hiring pace accelerated during the summer as Google tried to pluck the most promising graduates from college classes. Google ended June with nearly 20,000 employees, up from 3,000 workers at the end of 2004.

Within the technology sector, software vendors--whose products can help other companies automate processes and save money in downturns--have held up particularly well so far, said Andrew Bartels, a Forrester vice president. And large U.S.-based companies have been able to offset weakness domestically with solid growth overseas.

One example is Hewlett-Packard Co., the world's largest PC maker, which has 176,000 employees worldwide. It continues to add jobs in the U.S. despite the economic downturn, including researchers for its HP Labs division and customer support staff in Arkansas and New Mexico.