Boston-area tech jobs decline

Greater Boston ranks third among top information technology labor markets that have lost a significant number of tech jobs, according to a study released yesterday.

New data from the University of Illinois at Chicago show the number of employed IT workers in Greater Boston dropped to 46,000 in April 2004, down 35.4 percent from 71,200 in March 2001.

Boston ranked third in IT job losses compared with six other metropolitan areas. The San Jose area ranked first, with 61,900 employed IT workers in April 2004, down from 92,500 in March 2001. San Francisco, ranked second, lost 26,900 workers during the same period. By contrast, 24,300 workers in Boston saw jobs disappear.

More workers lost jobs in Boston than in Chicago, Dallas, Seattle, and Washington, D.C., said the study, which was funded by the Ford Foundation for the Washington Alliance of Technology Workers in Seattle, a division of the Communications Workers of America, a telecommunications union.

Nationwide, 2.1 million people were working in IT jobs at the start of the recession. By April 2004, however, those numbers had dropped to 1.7 million, the report said.

"The recession that began in March 2001 was devastating to IT workers," said Nik Theodore, coauthor of the study. "The IT industry lost 197,000 jobs during the nine-month recession, from March to November 2001."

Theodore said another 206,000 IT jobs disappeared during the economic recovery, bringing the total number lost to more than 400,000 positions nationwide.

Tim Costello, coordinator of the North American Alliance for Fair Employment in Boston, attributed the decline to employers' skittishness over the recovery and corporate America's growing reliance on offshore outsourcing. The group is affiliated with the Washington alliance.

Earlier this year, TowerGroup Inc., a Needham research firm, reported the amount of money spent on IT offshore outsourcing by the top 15 US financial institutions would increase from about $1 billion today to $2.5 billion in 2008.

That trend and the dip in hiring has meant less work for Leo Scheck Jr., a New Bedford software developer. He was laid off in November 2001 from a contract position that he'd held for six years. In the last 32 months, he has worked only six months.

"Things are not good," said Scheck, 62. "I have never been out of work like this, ever."

Staffing agencies and recruiters in the Boston area said demand is up for individuals with project management experience or unique IT skills but not necessarily for those with basic skills. They said the demand appears to be in the financial services sector.

"A lot of what we are seeing is some demand for software engineers in the financial services area and stronger demand for the infrastructure people," said Aaron Green, president of the Professional Staffing Group, an employee staffing agency in Boston. "We have not seen a lot of demand for software outside of financial services."

Diane E. Lewis can be reached at dlewis@globe.com.