Dallas was home to a huge proportion of the telecom workforce at the end of the boom. That meant the bust hurt that much more, says Royce Holland.
"At the end of 2000, there were 1.7 million telecom jobs in the U.S. – and Dallas had about 5 percent of those. And now over the last couple of years, you have seen over half a million of those jobs lost," said Mr. Holland, chairman and chief executive officer of Dallas-based Allegiance Telecom Inc.
"I think Dallas has been hit disproportionately by that, and those over half-million telecom jobs drove about a million tech jobs. That went away as well."
Mr. Holland and the nine other members of The Dallas Morning News Board of Technology Experts met recently to discuss the state of the telecom and information technology industries, touching on the employment outlook and trends such as overseas outsourcing.
On IT and telecom jobs, the members agreed that many jobs have been permanently lost – and while hiring will pick up soon, the recovery will be gradual.
"We're never going to get those 500,000 jobs back," said Jeff Rich, chief executive of Dallas-based Affiliated Computer Services Inc. "That's just a function of the economy and the capitalist system here in America."
When many of the low-level – and even some high-level – jobs come back, they're going to be outsourced overseas, Mr. Rich said.
"The trend to outsource IT jobs, finance and accounting jobs and human resources jobs – back office, noncore staff – in the communications market is really continuing unabated," he said. "It'll get some noise at election time, but the economics are too powerful."
Still, the board members agreed that domestic tech hiring will likely improve in 2004.
Hasan Pirkul, dean of the University of Texas at Dallas' management school, said that some telecom companies are getting ready to hire.
"They are not yet hiring, but they are bringing on contract workers, and that's the beginning," he said.
Dr. Pirkul said that companies won't be able to send all their tech jobs overseas. But many workers are going to have to learn new skills.
"You still have to have people here," he said. "You can have them do certain things overseas. But since you are providing service to people here, you still have to have a sizable number of technology and management pros who have to configure the system, sell the system, support the system, and they're going to be in the U.S. or wherever their customers are.
"It will settle out to where we have the services end, and the production end is done elsewhere."
Despite the job carnage of the last few years, even telecom will grow again eventually, said Guy Hoffman, a partner at TL Ventures, which invests in start-up firms.
"There will not be an equal number of jobs, and the jobs that do come back will not be paid the same level that they were paid before," he said. "But at the same time, it is going to come back."
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