Jobs market set for "difficult" 2009: Dice CEO

NEW YORK (Reuters) - U.S. professionals in fields like technology, finance and accounting can expect more job cuts in coming months, but for some the worst may be over, Dice Holdings Inc's chief executive said on Friday.

The company -- which runs specialized career sites focused on the information technology, engineering and financial services fields -- is feeling the labor market slowdown in its own business and is taking steps to adapt, such as pulling back on marketing costs.

Government employment data is "catching up to reality," CEO Scot Melland said in an interview, and is consistent with what Dice has experienced since the end of September.

"We had a worsening of the credit crisis and a dramatic drop in the stock market that shocked many companies into questioning where their business would be next year. We've gone from a period that's challenging to one that's really difficult."

Melland spoke with Reuters after the release of a weaker-than-expected monthly U.S. government jobs report.

U.S. non-farm payrolls fell by 240,000 last month and prior months' job losses were revised sharply higher, the Department of Labor said. The jobless rate, at 6.5 percent, tops the previous recession's peak and is the highest since 1994.

"The fact that we're now seeing increases in unemployment among professionals, what that indicates is companies are making deeper cuts into their organizations, preparing for what they see as a difficult year next year," Melland said.

Cautious customers are instituting hiring freezes and reducing overall recruitment budgets, which in turn impacts the size of Dice's contracts and its renewal rates, Melland said.

He added the United States is definitely in recession, and noted that unemployment tends to peak after a recession ends, so it will probably keep rising.

But jobless rates are unlikely to revisit highs seen in the 1980s, when they topped 10 percent, he said. Payrolls did not recover as steeply after the last recession, so companies are still relatively lean.

In coming months, companies will rein in technology spending, so unemployment in tech is likely to increase, he said. But job losses in financial services are already so steep, there is some room for optimism.

"We'll still see more job losses but it will not be as dramatic as it has been," Melland said about financial services. "I think the worst is probably over."

FLEXIBILITY IN TOUGH TIMES

New York-based Dice's websites include Dice.com for tech jobs, ClearanceJobs.com for people with security credentials, and eFinancialCareers.com.

Melland said Dice has been preparing for the downturn and will redirect its marketing dollars in the current climate to win new clients.

"We expect 2009 to be a difficult year for the economy and it will impact our business," Melland said. "We made substantial investment over the past three years building our communities and we spent a lot on marketing. Those investments give us flexibility to pull back when times get tougher."

The company will provide its initial estimates of next year's performance when it releases fourth-quarter results in January.

"Our business will be impacted and our revenue will be impacted by a downturn in recruiting in financial services and technology," Melland said. "(But) we still feel we have growth opportunities with customers that have never used us before."

Another government stimulus package could help support an eventual labor market recovery, Melland said, especially one focused on infrastructure spending.

Fears about a deep recession have dragged down employment services stocks to multi-year lows. Stocks like Manpower Inc. and Monster Worldwide Inc are down 50 percent or more from recent highs, though they were higher in midday trading on Friday.

Dice shares trade at about 12 times next year's estimated earnings, a slight premium to online recruiter Monster, which has a multiple of about 11.

Dice shares, which sold for as much as $12 last November, were up 5 cents or 1.3 percent at $3.95 in midday trade on the New York Stock Exchange.

(Editing by Leslie Gevirtz)