In particular, the problem is industrial capacity. In the 1990's, with the tech boom and the creation of an enormous amount of paper wealth, it was not only the high tech industries that benefitted from investment. Whether through financial diversification or through "trickle down economics" spurred on by the consumer spending of the 1990's, substantial funds rolled in to industries of all sorts.
This investment, in turn, resulted in new plants, modernization and a lot of new computers as well as the movement of some jobs overseas. Where new plants were built, more people were hired and the current 73% utilization of most manufacturing facilities jeopardizes existing jobs. At this point, expansion (as we have seen) takes the form of filling up the existing capacity and reducing the likelihood that existing employees will be laid off or have their shifts shortened.
A significant portion of the decline in the 1990s and the early 2000s can be attributed to the heights of the climb.
Take, for example, PC sales. PC manufacturers saw a large (and out of cycle) increase in sales in the years leading up to 2000. Due to the "Y2K" bug, many companies chose to replace servers and especially desktops and laptops in order to guarantee that they did not fall prey to the effects of this problem. As such, the PC industry, which had taken advantage of the cyclical nature of business and the natural offsets between company's buying cycles to smooth out their growth, received a big shot in the arm in the late 1990s, followed by a large drop off after 2000.
In looking at PC purchasing in most organizations, a 3-5 year cycle is about normal for replacement of computers in commercial settings. As such, the recent upturn in purchasing of computers as replacements is not unexpected. However, organizations that are happy with their pre-2000 acquisitions are seldom purchasing new computers for new employees because they over-purchased in the 1990s or have excess inventory because of layoffs.
All in all, the "irrational exuberance" of the 1990s has been a significant contributor to the "jobless recovery" of the 2000s. Although many complain that the layoffs have not been counteracted, what is important right now is that they haven't been compounded by yet more layoffs, which would have lead to an even deeper recession.