Tech job cuts on the decline

If employment reports are any indication, the high-tech sector seems to be stabilizing. Challenger, Gray & Christmas says job cuts in the industry dropped to 29,513 for the first quarter of 2004, the lowest level in more than three years of tracking.

Job cuts to the technology sector of telecommunications, electronics, computer and e-commerce were 64% lower than the 82,328 layoffs announced in the fourth quarter of 2003. Overall, tech workforce reductions accounted for only 11.2% of the 262,840 job cuts announced January through March. By comparison, the sector was socked with 32% of all job cuts in 2002 and 36% of all workforce reductions in 2001.

Telecom workers by far suffered the most cuts in the tech sector. Telecom firms announced 20,681 job cuts in the first quarter, more than four times the number of cuts announced by the second ranked computer industry.

“This may not mean that telecom is the weakest of the technology industries, but it is clearly the most volatile.  While some areas in this industry are consolidating, others are expanding,” says John A. Challenger, CEO of outplacement firm Challenger, Gray & Christmas. He notes that outsourcing is to blame for slow job creation in the industry.