Tech job cuts show Q2 dip, study says

Computerworld - With cautious optimism, outplacement services vendor Challenger, Gray & Christmas Inc. announced yesterday that second-quarter tech job cuts in the U.S. were down 33% from the previous quarter. But it said the cuts were still running 16% higher than in the same quarter one year ago.
In its latest quarterly job-cut survey of the telecommunications, computer, electronics and e-commerce sectors, the New York-based company reported 39,720 lost jobs for the quarter that ended June 30. That's down 33% from the 59,537 jobs lost in the first quarter, which ended March 31.
The job cuts for the second quarter, however, were still 16% more than the 34,213 cuts announced in the same quarter a year ago, the company said. For the first six months of the year, Challenger, Gray & Christmas reported 99,257 tech job cuts; That's up 56% over the 63,726 cuts recorded in the first half of 2004.
Cuts in the technology field accounted for 18.4% of all of those announced in the first six months of 2005, the company said. One year ago, tech job cuts represented 13% of the six-month total.
The most recent job losses took place largely at computer firms, which have seen weak demand for semiconductors as well as an apparent reluctance to invest in new technology on the part of corporate customers, according to the survey. Job cuts in the computer sector totaled 20,470, or 51.5% of all technology-related job cuts in the second quarter.
The biggest improvement appeared to be in the telecommunications sector, which saw the number of job cuts fall 76% from 35,079 in the first quarter to just 8,342 in the latest quarter.
"The economy is growing and many sectors are adding workers at a steady pace, but the technology sector has been conspicuously absent from this job creation," Rick Cobb, executive vice president of Challenger, Gray & Christmas, said in a statement. "Some blame high oil prices -- as one industry insider recently told USA Today, 'Every dollar that goes into the fuel tank is a dollar that is not going to Best Buy.'"
"The other problem affecting the computer and electronics industries is that corporate customers have accumulated a large reserve of cash, but instead of investing it in new technology, they seem content to just hold on to it," Cobb said. "The good news is that we had a significant drop in tech-sector job cuts last quarter, which could signal a return of better times."

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