According to Hoyle...
Software
Development Jobs in a Down Economy, Part III
May 2009
by Jonathan Hoyle
jhoyle@maccompanion.com
macCompanion
http://www.jonhoyle.com
The unemployment rate has nearly doubled in the past year and a
half, jumping by nearly 20% in just the time I began this series of
columns.
When Part I of this series was published, the United States Bureau of Labor Statistics announced the January 2009 jobless
rate as 7.6% (up from 7.2% the month before).
With the publication of Part II, the February data became
available, jumping that figure to 8.1%. As I write Part III (this column), I have the March figures before me,
showing unemployment now at 8.5%, the highest in over a quarter century. According to BLS, the last upward spike
in the unemployment that reached 8.5% was in December 1981. That spike continued for another year,
reaching a peak of 10.8% before it finally reversed course. More soberly, this current spike has
twice the angle as the 1981 spike (that is to say, it is taking only half as
long to go from 7.6% to 8.5% now as it did then).
Pretty depressing sounding.
Then why is it that I am receiving more calls from job recruiters
than in recent memory?
Part of it is that an overall figure of 8.5% can be rather
deceptive. The U.S. job market is
not a homogeneous environment. The
biggest differential is job type: Farming & Construction is seeing a
whopping 12-15% jobless rate, whereas management and professional occupations
are seeing only 2-3% unemployment. Also, location makes a big difference. The overall rate is below 5% in places like Wyoming,
Nebraska and North & South Dakotas, but exceeds 12% in Oregon and
Michigan. And if you are really
good at what you do, you will always be more in demand than others in your field.
But in my case, it's mostly because I am a Macintosh (as opposed to
Windows or Linux) software developer that I am getting these calls. But more about that in a moment.
Are You in a Recession?
Forget about the country as a whole for the moment. The question can be asked: Are you
*yourself* in a recession?
What does it mean for an individual to be in a recession? Essentially this: If disaster struck
and you lost your job, would you be able to find a comparable job in a
reasonably short period of time?
If willing to relocate, software developers, QA and other
engineering support would likely do better than others in this current economic
climate. However, most employers
find little reason to offer top salaries, considering the increasingly larger
pool of talent that becoming available by layoffs. Supply & Demand is at work (as always), and as the
supply of potential engineers grows, the price you have to pay them goes down. This also discourages good talent who
are considering other opportunities. Since many unemployed people would be happy to take any reasonable
salary, employers see bargains everywhere. If you don't wish to be a bargain, then you're likely to
hang out where you are until things turnaround.
However, Apple developers and QA people (who are willing to
relocate) can find work tomorrow. Why is that?
The Mac Factor
I led off this column with depressing statistics, and even if the
software industry is less impacted, it is still pretty rough. And recessions have a habit of
spiralling downward. Once one
business experiences trouble, it cuts back on discretionary spending, causing a
decrease in business with its clients, which in turn perpetuates the cycle,
radiating the cutbacks outward. And companies experiencing financial difficulties are not in the best
position to hire.
In January, Microsoft announced its net income falling 11% (with
Zune revenue declining by a whopping 54%), and has been forced to announce
additional layoffs of 5,000 people. In April, Microsoft's jilted dance partner Yahoo announced more job cuts
(on top of the 2,600 they already let go in 2008). AMD's revenue dropped by a third in January, and the entire
semiconductor industry appears to be in free-fall. Intel had a tough April, with its revenue down 26% and its
income down by 55%. Managing any
profit at all, or at least to break even, is a major achievement. Google managed to do it, squeaking out
a 6% revenue increase in April.
And then there's Apple!
In January, Apple announced its jaw-dropping Q1 numbers, breaking
all company history with best ever revenue and best ever profits. In this economy.
Of course, that was just a fluke, right? After all, it was Christmas, and people spent their last
money on the holiday. Any gain so
big in Q1 will be paid for by poor performance in Q2. Surely Apple would soon join the ranks of the others getting
spanked financially. There is no
way Apple can continue profitingin this way in such an economy. When the April figures come out, there will be a reckoning, and we'll
just see the faces of all those smug Mac fanatics then...
Yeah, well guess what?
Q2 2009 was Apple's best non-holiday quarter in corporate history: a
record $1.21 Billion in profits (up 15% from 2008) and record $8.16 Billion in
revenue (up 9% from 2008). Apple
retails stores also seemed immune from the economic decline, with sales
actually going up from $1.45 Billion to $1.47 Billion.
For Mac bashers looking for the worst news in these numbers, let me
save you time: sales of Macintosh computers themselves declined, although only
by a meager 3%. But before you Mac
haters try to make too much of that, note that the Windows market shrank by 7%,
meaning that the Macintosh marketshare actually went up with this decrease! Despite the sales decline, a higher percentage of buyers are
choosing Macs over Windows now. Hell, even Apple's bad news turns out to be good news for them.
As Apple continues to prosper, and businesses that have dealings
with Apple (whether directly or indirectly) continue to do so. As various enterprises find that that
their Macintosh-related work is prospering relative to everything else, that's
where they'll be concentrating greater effort. Add to this the already low numbers of qualified Macintosh
engineers, and you find that the need to hire Mac people continues to exist.
And that's just the Macintosh platform. Let's not forget the incredible explosion of iPhone
development, which Cocoa/Mac OS X developers are already competent to
perform. Windows and Linux developers
do not have this benefit. Worse
still for PC engineers, it seems all of Asia is mass producing inexpensive
options for Windows and Linux work. If an Indian or Chinese Windows developer can be paid a fifth of what an
American equivalent can be, this recession is just making offshoring far more
compelling.
Interestingly, there
are very few Mac development sites in Asia, and they are not nearly as
plentiful (nor as competent) as their PC counterparts.
Conclusion
Now this is not to say that state-side Macintosh engineers have not
been hit by this recession. They
certainly have. And more are
likely to be hit in the near future. But what I am saying is that Mac people in this hemisphere are much less
likely impacted. And this is good
news. And eventually this
recession will end. I don't know
if that will happen this summer, next summer or three years down the line. But at some point it will turn around. And when it does, I firmly and
sincerely believe that Apple will come out the stronger for it. And for that reason, if you wish to tie
your horse to some fence post during this economic downturn, Apple' fence post
is about as good as you're going to get.
Coming Up Next Month: Our
annual WWDC Preview column! Don't
miss it!
To see a list of all the According to Hoyle columns, visit: http://www.jonhoyle.com/maccompanion
