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With Sun's job cuts, tech sector layoff toll in '08 hits 140,000

The bulk of job losses at tech firms have occurred since July

November 14, 2008 12:00 PM ET

Computerworld - The economic downturn that has resulted in tens of thousands of layoffs in the housing and financial services sectors is now bearing down on the tech industry. The job cuts announced by Sun Microsystems Inc. on Friday are only the latest in the growing toll.

Sun plans to cut as many 6,000 jobs, or about 18% of its workforce, a move that raises the total number of technology-related job cuts announced so far this year to more than 140,000, according to Challenger, Gray & Christmas Inc., a Chicago-based outplacement consulting firm that tracks layoff announcements by sector.

Most of the job cuts have taken place in the past few months, with nearly two-third of them, or 89,500, occurring since July.

At the current rate, Challenger is forecasting tech-sector job cuts totaling 180,000 by the end of the year.

The rapid increase in job losses follows an increasingly pessimistic spending forecast. Research firm IDC said this week that IT spending growth in the U.S. will be less than 1% in 2009, a sharp drop from an August forecast that projected a 4.2% increase next year.

In 2007, the number of job-cut announcements in the tech sector totaled 107,300; in 2006, it was 131,200; and in 2005, it hit 174,744.

The worst year was 2001, the year the dot-com bubble burst, when nearly 700,000 tech jobs took place, according to Challenger.

Companies that announced layoffs this month include Santa Clara, Calif.-based Applied Materials Inc., which this week unveiled plans to reduce its global workforce by about 12%, or 1,800 workers. National Semiconductor Corp., said it is cutting 330 jobs.

John Challenger, CEO of Challenger, Gray & Christmas, said in a statement that by the end of 2008, "we may also see cuts from Cisco Systems, Qualcomm and Nokia, all of whom are reporting falling sales amid the weakening economy."

One of the largest cuts announced so far this year came in September after the merger of Hewlett-Packard Co. and Electronic Data Systems Corp. HP said in September that it planned to cut as many as 25,000 employees as a result of the merger.

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