This Week in NW
Pink-slip nation: Layoffs hit new high
Layoff numbers hit a new high in December and January – and not just among Net Economy workers. Axes are falling all over the U.S.
A total of 15,448 Internet workers at 120 companies were shown the door in January, making it the worst month yet of the dot-com implosion, according to TheStandard.com's Layoff Tracker.
But the trail of pink slips isn't just following employees of the Internet Economy. Newly released data from the Bureau of Labor Statistics shows that layoffs are increasing nationwide.
In December 2000, there were 327,000 layoffs - the highest one-month total since the Department of Labor started keeping track in 1995 - and that's just counting cases in which 50 or more employees were dismissed at once. Every month since October 2000, the number of layoffs nationwide has climbed by more than 100,000.
Among Internet Economy employees, January saw a dramatic 43 percent increase over the 8,771 workers let go during December. The number of firms dismissing employees rose 12 percent, and many of the companies listed on the Layoff Tracker in December weren't new to the list - 1 in 5 were returning to the Layoff Tracker with another round of cuts.
In January, layoffs from technology firms were omnipresent - one quarter of those axing Internet employees were tech companies. The Net-related departments of tech firms continued to take the hardest hits - their presence on the tracker doubled from the prior month.
Layoffs at e-commerce companies may have peaked in December, when they accounted for a quarter of firms listed on the tracker, compared with January, when they represented slightly less than one in five.
Other industries featured prominently on the Layoff Tracker included consulting services, as well as media and entertainment firms, making up 16 percent and 12 percent of January layoff announcements, respectively.
The severity of cuts at the companies listed on the Layoff Tracker varied greatly in January, from as few as 12 employees at Juno Online to as many as 1,300 employees in the case of Amazon.com (AMZN) . Interestingly, Amazon was the third company ever to be listed on TheStandard.com's Layoff Tracker almost one year ago, when it restructured and let go 150 people.
Six in 10 companies that gave pink slips to Internet workers last month cited cost-cutting as the primary reason. The second most common reason was a shift in business models, cited by 18 percent of companies. Companies going out of business accounted for 11 percent of layoffs, and post-merger consolidation rounded out the pack with 10 percent.
In addition to the spike in January layoffs at Internet companies, several Net executives either jumped ship or walked the plank. According to TheStandard.com's Ex-Exec Tracker, 83 executives left their posts last month, almost equal to the 86 executives who departed in December.
From its inception in December 1999, The Layoff Tracker has recorded a total of 51,408 Net-related layoffs. That's about 2 percent of the overall number of Internet Economy employees estimated for the first half of 2000 in a study by the University of Texas at Austin.
TheStandard.com's Layoff Tracker only includes confirmed reports of staff reductions affecting 10 or more workers at Net-related companies, or workers from the Internet divisions of offline firms. Both U.S. and foreign firms are included, but smaller firms, such as those listed on the Nasdaq bulletin board, are not included.
Amanda Christensen and Katie Motta contributed to this report.
For more in-depth coverage of the Internet Economy, visit The Industry Standard, a sister publication to Network World. Copyright 2000 The Industry Standard. All rights reserved.