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Check out Eagle’s Job Centre for the best in IT job opportunities and The Eagle Blog for our CEO’s views on the industry, business, and life! |
In this issue: 4 Industry News |
Three years ago, in October 2006, Oracle paid $440 million for Stellent and EMC paid $165 million for Avamar. At that time, worker confidence was good, unemployment rates in Canada and the US were low, and IT spending was relatively strong. Two years ago, in October 2007, Microsoft valued Facebook at $15 billion when it took a minority stake for $204 million, SAP paid $6.8 billion for Business Objects, and Nokia paid $8 billion for Navteq, a mapping software company. IT workers were happier and more secure than ever, NexInnovations closed its doors and a Royalty Review caused consternation for Canada’s oil patch. Last year, in October 2008, doom, gloom and market meltdowns were the big news. The number of IT jobs in the US dropped by 2% quarter over quarter and Symantec, eBay, and Yahoo all announced significant layoffs. A $5.8 billion merger of telcos in the US was the big deal of the month, with rural telephone company Century Tel buying its bigger peer Embarq. Ebay bought 3 companies – Bill Me Later ($945 million) plus Denmark companies Ben Bla Avis and BilBasen ($390 million). Symantec paid $695 million for MessageLabs, Tata paid $505 million for Citi’s Indian BPO arm, and HP paid $360 million for LeftHand Networks.
That brings us to October 2009, and the news continues to be mixed. Cisco went on a spending spree this month, paying $3 billion for Tandberg, $2.9 billion for Starent and $183 million for ScanSafe. Also this month Adecco paid about $1.1 billion for MPS Group (includes Beeline); Emerson Electric beefed up its datacenter capability paying $1.2 billion for Avocent, and Sprint Nextel avoided some legal issues by shelling out $831 million for iPCS. Perot Systems, who themselves were bought by Dell last month, announced that they picked up Bearing Point’s Chinese operations, and there were a few other deals that included interesting companies such as Siemens AG, Oracle, AT&T, MTS Allstream, and Tibco.
News about the economy was mixed, the Canadian unemployment rate fell for the first time in almost a year, Monster’s unemployment index dropped GDP in the US decreased and Spherion’s employee index shows little change. The staffing industry continues to be hammered with many large players reporting revenues down over same quarter last year by 20% to 30%. There were also more stories related to identity theft with Blue Shield and Blue Cross compromising data on 800,000 doctors and the State of Virginia losing personal data on 100,000 adult education students.
Dell had a tough month announcing plant closures in the US and being bumped by ACER who are now the world’s number 2 PC vendor, after HP. AMD’s CEO joined the list of tech executives to be arrested, this one for insider trading and possibly related to the case against Raj Rajaratnam who has apparently been receiving insider tips from the tech industry for years.
Most of us continue to work as hard and harder than ever before as we fight to recover from the last year. Companies like Cisco have seized the moment and are getting stronger through acquisition (3 this month), the landscape is changing and it will be interesting to see how this news looks 12 months from now.
For more stories and the details behind the above snippets, click here.
IT JOB MARKET ACROSS CANADA – Mini Update
General Observations:
It was in July that Canada announced the recession was over, but we are definitely still suffering from a hangover. In general terms from a labour market perspective, we are still in a buyers market, with more people looking for work than clients looking for workers! There are of course some exceptions where very specific skill sets are in demand, creating some “mini skills shortages” but we are not yet seeing labour shortages.
After a couple of months of moderate growth, Canada lost 43,000 jobs in October creating an unemployment rate of 8.6%. Last year Canada had its first deficit in more than a decade at $5.8B and this year it is projected to be $55.9B. The “wisdom” was to stimulate the economy; however, there has not been a visible impact on the IT sector…except maybe a few more PCs (netbooks?) were sold. The result will be cuts in government spending which WILL have a negative impact on jobs in our sector. Coupled with provincial deficits (even Alberta is looking at a $7B deficit), there will be less work in government for a while.
More Specifically:
Here at Eagle we are continuing to see a steady increase in orders from our clients, but certainly nowhere near the activity of the years leading up to the recession.
The GTA (Greater Toronto Area), driven by the financial sector, was probably the first market to be hit by the recession and has been the first to recover. We are seeing reasonable and growing activity in this market both in the demand for contract staff, and full time resources.
Alberta was Eagle’s busiest market prior to the recession but a big hit to both oil and gas prices, along with all the other nasty economic news hurt that market. It was slower into recession than the GTA, and is slower returning to normal too. Oil prices are back close to $80 and, after hitting a 7 year low, Natural Gas prices seem to be recovering too. Perhaps driven by those realities we are seeing an uptick in activity in Alberta, but still nowhere near the demand that we saw a little more than a year ago.
In Ontario, Bill 139 came into effect and we will see some impact from this as staffing companies adjust to the new regulations and associated costs of doing business. We expect that the increased business risks, increased administrative burden, and all of those associated costs will result in a reduction in available temporary jobs in Ontario.
The Federal market in Ottawa is always one of the biggest markets, but it continues to “tick along”, with no increase in demand and no new big initiatives causing excitement. The continued focus on procurement issues, the propensity for legal activity by disgruntled suppliers, and the handcuffed minority government seem to have a damper on this market.
Elsewhere for Eagle, we are not seeing any appreciable increase in activity. There are pockets of business needs in Montreal and in Vancouver, Winnipeg seems relatively quiet and Eastern Canada has never been a particularly busy market for us. Having said that, a recent report indicated that the Maritime provinces have weathered the recession better than most, but mostly because their manufacturing base was small so there was little to lose.
On the candidate flow side of things, resumes have been flooding in at a relatively consistent rate over the last three months. October was a little slower than the previous two months, but November is picking up the pace again! This can be attributed to several factors, (a) we are posting more jobs as our clients increase their hiring; (b) many employees are a little disgruntled with their current situation – perhaps they have had pay cuts and/or increased responsibilities, etc. so they are looking to move; and (c) there are still plenty of people “out there” looking for work!
The following are some facts/indicators we are watching as of time of writing:
>The price of oil is now close to $80 a barrel which is good news for IT projects at oil companies.
> Natural Gas prices have risen significantly to around 16 cents, after hovering down at seven year lows of 9 cents. This should start to have a trickle effect on confidence in that sector.
> The TSX moved up above the 11,500 range and is close to its 52 week high … a positive sign.
> The Canadian dollar is strong, currently above 95c US. Not always a good thing for Canadian business, but a positive economic indicator.
> Prime remains at 2.25%, making borrowing inexpensive. This is good for when companies feel optimistic enough to invest!
> Unemployment is still an issue. After a couple of months of modest growth we lost 43,000 jobs in October and have an unemployment rate of 8.6% nationally.
> The Alberta government is forecasting a $7 billion deficit, and announced government cuts to projects of $430 million
> Many sectors appear to be picking up activity – banks, oil companies, provincial governments and telcos all appear to be picking up steam.
> There have been few signs that any “stimulus” package will bring relief in the IT services sector. Hardware companies are benefiting from tax breaks but no big new IT services spending yet!
In Summary:
This should be one of the busiest times of the year in our sector. The Summer holidays are done, and the holiday season is not here yet, so the focus is on “getting things done”. There is increased activity, the economic indicators are generally good, and here at Eagle, there is more of a “buzz” in the air than we have seen for some time.
Having said that, the recovery is slow and clients are very demanding. It is still a buyers market, but slowly changing and that always causes a little confusion in the market with candidates thinking they have a little more power in the negotiation of rates than they really do.
It will be 2010 before we see a real shift in the market and a return to more skills shortages and some labour shortages. Meanwhile, the recovery is happening, more and more clients are looking at new initiatives, and the demand for resources is increasing. As a staffing company, it would be nice to see those increases happen everywhere, and happen faster,but we can’t be greedy!
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For a listing of Eagle’s latest job postings, please visit Eagle’s Job Centre. In addition to searching for the latest jobs, Eagle’s Job Centre gives you the ability to create your profile, update your profile, update your resume and search all jobs.
Eagle is always looking to meet new contractors who have the skills that match our clients’ needs. If we place your qualified referral on contract, we will happily say thank you to the tune of $500.
For more information, please refer to our website or contact the National Eagle Staffing Solutions Team (NESST) at 1-866-78NESST (63778) or via email at NESST@eagleonline.com.
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