WHEN HI-TECH FEVER WAS at its height in the United States, Asia followed right behind. Dotcoms spread like wildfire, tech talent was madly fought for, valuations soared and then crashed. But while the fairy tale has ended in tears and job losses across the U.S. and now Europe, in Asia the lay-offs have yet to materialize.

In February, U.S. imports fell by almost 20% from the month before--the largest single drop recorded since the U.S. Department of Commerce started tracking the data in 1982. That means many Asian countries have seen their incomes plummet. Electronics exports to the U.S. account for almost a quarter of Malaysia's GDP, while South Korea racked up a $3 billion surplus in IT products last quarter. But in spite of growing inventories and falling orders, companies in the region haven't yet responded with the scale of redundancies now sweeping the U.S., and Europe.

One of the main reasons for the softer landing in the region is that labour simply takes up less of the overall cost pie, says Anand Shankar, human-resources consultant at Hewitt Associates in Singapore. As Western companies move to cut costs, they are shifting as many operations as they can to Asia, either expanding their own facilities or outsourcing manufacturing entirely, he says.

The effect has been to create more jobs in manufacturing centres like China, India, Malaysia and Taiwan. "Wage costs as a percentage of operational costs in Asia are much lower than in the U.S.," says Shankar. "Why focus on lay-offs, which are going to damage your reputation but aren't even going to have a big impact on the bottom line?"

Mark Matthews, Standard & Poor's chief regional strategist, says that cultural and legal barriers, together with different corporate structures, have prevented Asian companies from turning to quick-fix lay-offs. While labour markets have become more flexible after the Asian financial crisis of 1997, many companies still have a paternalistic attitude toward their employees. Strong labour unions, like those in South Korea, and the traditional idea of a job for life present further obstacles. Traditional family-run companies in Asia also are far less worried about what their shareholders will think, and are less likely to cite responsibility to shareholders as a reason for anything, let alone labour cuts.

Even embattled IT multinationals, which are downsizing elsewhere, aren't cutting jobs in Asia. In fact, many are expanding in the region. Lucent recently opened a software facility in India while announcing 10,000 lay-offs throughout the rest of the organization. IBM is planning to hire 1,700 workers in India in the next year, while Cisco still can't get enough workers in China.

India's software companies are keeping their staff on even as their earnings plummet. The big three--Infosys, Wipro and Satyam--derive more than 70% of their fast-falling revenues from the U.S., but none has yet moved to cut its workforce, preferring instead to keep them "sitting on the bench." Infosys's utilization rate fell to 67% in the first few months of this year. That means less than three out of four employees have any work to do. According to Ramesh Venkataraman, principal at management consultants McKinsey & Co. in Bombay, companies are reluctant to let talented workers go in case they have to scramble for hi-tech talent when the economy does turn around.

Asia hasn't completely escaped the blood-letting that has characterized the IT industry in the West. U.S. disk-drive maker Seagate Technologies recently closed its factory in Penang, forcing 4,200 out of work. Singapore's Creative Technology, Taiwan's Acer, Korea Telecom and Dacom of South Korea have all announced lay-offs. But most of the cuts have been on a small scale--around 100 or 200 at a time--and have not had a wider impact on local economies.