High-tech jobs cuts ease after telecom shakeout: survey

WASHINGTON (AFP) Apr 08, 2003
After the massive shakeout in the high-tech sector, the number of job cuts in the first quarter of 2003 fell 45 percent from the same period a year ago, according to a survey released Tuesday.

Job cuts announced by high-tech firms in the first quarter plunged to 61,032, compared with 110,247 announced in the same quarter a year ago, according to the survey by the consulting firm Challenger, Gray and Christmas.

The improvement was due to a significant drop in telecommunications job cuts. Employers in this industry announced just 15,862 job cuts so far in 2003, down 81 percent from the 82,522 announced in the first quarter of 2002, the survey found.

The other segments of the technology sector -- electronics, computers and e-commerce -- all experienced increased job cuts.

Electronics job cuts doubled to 26,270 from 13,062 a year ago while computer makers and e-commerce firms saw job cuts increase 29 percent and 28 percent, respectively.

Through the first three months of 2003, technology job cuts represented 17 percent of the 355,795 cuts announced by all industries, according to the Challenger report.

This contrasts with the two previous years, in which technology accounted for 33 percent of the cuts announced in 2002 and 36 percent of those announced in 2001.

"With many of the weakest telecommunications companies now out of business or swallowed up by stronger firms, we could see a stabilization in terms of job cutting in this industry," said John Challenger, chief executive officer of the firm.

In 2001 and 2002 the telecom bust led to 586,634 job cuts, 50 percent of all technology jobs cut in those two years.

However, job creation in the sector may be hampered by the war in Iraq and companies' unwillingness, because of the uncertainty both here and abroad, to invest in new equipment, Challenger said.

"The same uncertainty may also impede spending on computers and other electronic equipment, both of which have seen job cuts increase since last year," he added.

"To make matters worse, many of the jobs lost in these industries may not come back, as more and more tasks are shipped to overseas suppliers and service providers, where tech labor is cheaper."

But Challenger said there are some signs that a high-tech rebound may be coming, after fourth quarter data showed that spending on technology equipment and software increased five percent, marking the third consecutive quarterly increase, after six straight quarters of decline.

SPACE.WIRE