US tech sector job cuts hit five-year high: firm

Published by rudy Date posted on February 2, 2009

WASHINGTON (AFP) — Nearly 187,000 workers in the US technology sector lost their jobs last year, the highest number in five years, consulting firm Challenger, Gray & Christmas said Thursday.

Challenger said telecommunications, computer and electronics firms slashed 186,955 jobs in 2008, 74.2 percent more than the 107,295 jobs lost in 2007 and the most since the 228,325 tech job cuts of 2003.

It said the pace of job cuts in the sector more than doubled in the second half of the year as the economy deteriorated.

“The pace of job cutting by tech-sector firms spiked 167 percent in the second half of 2008 and, if January is any indication, can be expected to remain heavy well into 2009,” the firm said.

Challenger said the final tally is not yet in for January, but noted that there had already been significant job-cut announcements from Sprint/Nextel, Microsoft, Motorola, IBM, Intel, Advanced Micro Devices and other companies.

The number of job cuts in the electronics sector jumped 89.7 percent last year over 2007 to 73,447, Challenger said, while telecommunications companies slashed 48,648 jobs, an increase of 72.5 percent over 2007.

It said the computer-industry cut 64,860 jobs last year, an increase of 61.3 percent over the previous year.

“Through the first half of 2008, it looked as though the tech sector might be one of the few areas of the economy to remain resistant to recessionary pressures,” said Challenger chief executive John Challenger.

“However, the economy’s continued slide here and overseas saw consumer and corporate demand for technology products and services drop rapidly, and these firms were suddenly under pressure to make significant cost-cutting moves.

“Cuts could reach even higher in 2009, as there is no evidence yet that the economy has hit the bottom of this downward portion of the cycle,” he said.

He said it was unlikely, however, that 2009 will rival 2001, when 695,581 tech workers lost their jobs amid the “dot-com bust.”

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