'Worst is Over' for High-Tech Layoffs

With a 50% reduction in high-tech job cuts from this time last year, one industry observer says it looks like the worst is over.
With a 50% reduction in high-tech job cuts from this time last year, one industry observer says it looks like the worst is over.

Technology-related job losses have taken a big dive. There were 47,998 job cuts announced for the third-quarter of this year, bringing the 2003 total so far to 145,997, according to a new report from Challenger, Gray & Christmas Inc., an international outplacement firm based in Chicago. That is 56% fewer layoffs than the 334,650 that slammed the already beleaguered industry between January and September last year.

''We're not out of the woods... but I think it's a sign that things are getting better,'' says John Challenger, CEO of Challenger, Gray & Christmas. ''Everything isn't hunky dory, but there are companies doing well. It's been getting better all year.''

The outplacement firm reports that the telecommunications sector is still taking a hit, largely accounting for the fact that the third quarter saw about 9,000 more job losses than the second quarter. In this past quarter, telecommunications job cuts surged 73% from a six-month total of 36,025 to a nine-month total of 62,389.

Challenger notes that there are high-tech sectors that are performing well -- wireless, broadband, security and basic tech jobs.

''Small- and medium-sized companies have been pouring technology into their systems so there's a lot of demand for help desk people, data base administrators and network operations people,'' he adds.

Overall, the tech sector is showing signs of health.

In the first nine months of 2002, one in three announced job cuts came in the high-tech field. This year, tech accounts for only 17% of the 872,080 job cuts.

''Cuts are still heavy,'' says Challenger. ''But in terms of where the industry was last year, certainly we're on a very positive slope... The numbers are definitely heading in a positive direction, particularly if you are one of the technology workers who has managed to keep or find a job. All that seems to be missing is significant job creation.''

But Challenger adds that he is hopeful that high-tech job creation is on its way. He points to a survey done by the Information Technology Association of America that found that 493,400 IT positions will need to be filled by May of next year. However, that is far from the 1.6 million tech jobs clamoring to be filled during the high-tech bubble of the late 1990s and 2000.

Challenger says increasing offshore outsourcing may keep those kinds of numbers from ever returning.

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