According to Hoyle...

Software Development Jobs in a Down Economy

May 2009

by Jonathan Hoyle

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 of trajectory 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, irrespective of the jobless rate.

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 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, right?. Surely Apple would soon join the ranks of the others getting spanked financially. There is no way Apple could continue profiting in this way in such an economy. When the April figures come out, there would 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 hay of that, you'll note that the Windows market shrank by 7%, meaning that the Macintosh marketshare actually went up, given this relative 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, businesses that have dealings with Apple (whether directly or indirectly) will likewise continue to do so as well. As various enterprises find that that their Macintosh-related work is prospering relative to everything else, that's where they'll likely be concentrating greater effort, moving forward. Add to this the already low numbers of qualified Macintosh engineers (relatively speaking), 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 that 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. Or 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!

[ Part I | Part II | Part III ]

To see a list of all the According to Hoyle columns, visit: http://www.jonhoyle.com/maccompanion

http://www.maccompanion.com/macc/archives/May2009/Columns/AccordingtoHoyle.htm