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Job losses in tech sector mounting; near '02 levels

Mon, May 11th 2009 12:00 am
In 2009, technology companies have been cutting jobs at a rate not seen since the fallout from the dot-com bubble.

Companies in the technology sector announced planned job cuts totaling 84,217 in the 2009 first quarter, according to the report released last month by global outplacement firm Challenger Gray & Christmas Inc. That's up 27 percent from 66,312 in the previous quarter, and the largest quarterly job-cut tally for the sector since the fourth quarter of 2002, when 133,511 layoffs were announced.

First-quarter tech-sector job cuts were nearly five times higher than the 17,345 cuts announced during the same period a year ago. Job cuts in the sector, which includes telecommunications, computer and electronics firms, have increased in each of the past five quarters, growing by an average of 42 percent every three months.

Despite the increase, the Chicago-based outplacement firm predicts that quarterly technology job cuts will remain below the levels reached during the dot-com collapse, which resulted in 1.16 million tech-sector job cuts in 2001 and 2002. During that period, employers announced an average of 145,467 job cuts each quarter.

"Unfortunately, no industry appears to be immune in this recession," CEO John Challenger says in the release. "Even the health-care sector, which has consistently added jobs throughout the downturn, is starting to see those gains shrink."

He says continued job creation in the federal government is being offset by large-scale losses at the state and local level, due largely to a rapidly deteriorating tax base. In addition to job cuts, a growing number of tech firms - including AMD, Seagate, Hewlett-Packard and Motorola -announced across-the-board salary cuts to help reduce costs.