IT downturn yet to hit Middle East

Despite the economic downturn affecting a great deal of IT companies worldwide, the Middle East appears to have escaped the worst of it so far.

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By  Robin Duff Published  September 13, 2001

The global economy is in the midst of a downturn. More than half a million employees have been fired, worldwide, since December 2000 and more are expected to follow suit in the coming months.

The long list of companies that have sacked employees includes Cisco, which has laid off 8,500 employees, Motorola 26,000, Intel and Unisys 5,000 each, and more recently, Toshiba which has announced that it would slash 20,000 jobs globally. The impending merger between Hewlett Packard and Compaq portends more job cuts.

Closer to home, only stray cases of job shedding have been reported. Dubai-based reseller Seven Seas, for instance, has laid off 27 staff in a restructuring that will see the company refocus on the business market. Another major local reseller has similar plans.

While the general feeling is that the global slump has not affected Middle East operations, a leading recruitment company in the Middle East, which has a large multinational client base, is not feeling so optimistic. The company, which declined to be named, clarified that contrary to earlier opinion, the surge in recruitment that is expected annually in September after the summer, has not happened this year.

“It isn’t picking up as quickly as it normally does,” admitted one consultant. She confirmed that while there are job vacancies, companies are unable to fill the slots, probably due to the global slump and the consequent freeze on recruitments.

On the whole, however, the IT sector in the Gulf seems to be upbeat. Various e-initiatives undertaken by the government and private sectors to move into the digital age and offer customers more user-friendly services have accelerated the demand for skilled IT people.

The UAE government has taken the first step in the Arab world by launching the e-government project as well as luring global players to operate from the Dubai Internet and Media City.

Consequently, current estimates show that the region's IT sector has an annual requirement of 100,000 skilled candidates while only a tenth of that number is made available in the market every year. Based on a study on the digital economy of the region undertaken by management consultant McKinsey and Co., the Gulf has the potential to create 500,000 high-quality IT jobs in the next seven or eight years, which would make the region the single largest employer. Eric Tien, Managing Director of Acer Computer Middle East also confirms that the “Middle East IT market…is currently enjoying a stable growth.”

One still needs to wait and watch to see how much the Middle East job market, especially the IT sector, has been affected by the world economy. For now, there is stability.

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