Despite a fourth-quarter surge in job cuts in the telecommunications sector, high-tech job cuts declined last year to 228,325. That figure was 51% lower than the 468,161 cuts announced in 2002 by technology companies, which include computer, telecommunications, electronics and e-commerce firms, according to Chicago-based outplacement firm Challenger, Gray & Christmas.
High-tech companies posted 82,328 job cuts in the fourth quarter of 2003, up from the 47,998 announced in the third quarter of the year and surpassing by 35% the 61,032 cuts announced in the first quarter of the year. Those first-quarter numbers were the highest of the year until the final three months of 2003.
Telecommunications companies posted 48,933 job cuts in the fourth quarter, up from the 26,364 cuts announced in the previous quarter.
The 228,325 high-tech job cuts in 2003 represent 18.5% of the 1,236,426 job cuts posted by all industries, Challenger said. Nearly half, or 49%, of the 2003 high-tech job cuts occurred in the telecommunications sector, which announced 111,342 cuts during the year. That's still less than half the 268,857 job cuts announced by that industry in 2002.
The computer industry came in second for the year, announcing 62,289 job cuts, a third of which came in the last three months of 2003, according to the Challenger report.
"Downsizing in the tech sector appears to have stabilised, which suggests that the business is not getting worse. Whether a strong rebound will occur in the near future remains to be seen," says CEO John Challenger. "There have been some optimistic predictions from some who sell computers and other tech products."
However, he doesn't yet see any pent-up demand for technology equipment — and as a result, there is no pent-up demand for technology workers.
"Making matters more difficult for job seekers in this sector is that in areas where there is demand, more and more companies are turning to less costly offshore outsourcing to get the job done," Challenger says. "The rapidly escalating use of offshore outsourcing poses a major problem for job seekers in the tech sector, who may have to learn new skills and/or lower their salary expectations in order to get back into the labour force."