Life sucks for computer geeks like me
Slower rate seen for cuts in high-tech jobs 'Smallest' trim said to be evidence of possible rebound across sector
Bob Keefe Cox News Service Jan. 22, 2006 12:00 AM
Finally, a little light is showing at the end of the tunnel for the nation's layoff-weary technology workers.
Nearly 175,000 technology workers lost their jobs last year, accounting for 16 percent of the nation's job cuts, a leading consulting firm reports.
The good news is that the cuts were the smallest since the dot-com bust, providing fresh evidence that tech-industry layoffs may be leveling off. Last year's job cuts were slightly less than the 176,000 or so in the previous year, according to outplacement firm Challenger, Gray & Christmas Inc.
By comparison, more than 695,500 tech workers lost jobs four years ago after the Internet industry imploded, according to the firm. The tech industry accounted for about 36 percent of all U.S. job cuts in 2001.
"Tech cuts have been trending downward year after year as firms continue to regain their strength after the devastating dot-com collapse in 2000 and 2001," John Challenger, CEO of the outplacement firm, said in a statement accompanying Tuesday's report.
Better yet, Challenger added, "many are expecting business spending on technology to rise significantly in 2006," potentially resulting in more hiring at tech companies.
Even amid signs that the economy may be slowing, a December survey by Business Roundtable, an association for CEOs, indicated that 56 percent of respondents planned to increase capital spending at U.S. operations in the next six months.
About 40 percent of respondents said they planned to add U.S. jobs in the next six months, while 41 percent said they expected no change in employment.
According to the Challenger report, last year's tech-industry layoffs were caused mainly by mergers. "Offshoring" - moving tech jobs overseas - was less of a reason.
"Those cuts (from offshoring) were minor compared with the fallout from corporate marriages," Challenger said.
Several of last year's biggest layoff announcements came from the telecommunications industry, after mergers of big telecoms such as Atlanta-based Cingular Wireless and AT&T Wireless; San Antonio-based SBC Corp. and AT&T Corp.; and Verizon Communications Inc. and MCI Inc.
Cuts in telecommunications accounted for 40 percent of all tech-industry layoffs last year. Still, telecom job cuts fell 29 percent from the previous year, to 70,127.
The decline in telecom cuts was offset, however, by a surge in cuts in computer and electronics companies.
Cuts by computer companies increased 22 percent, to 69,300, according to the Challenger study. Cuts in the electronics sector surged 86 percent, to 34,500.