CHICAGO – The tech sector shed jobs at an accelerating pace as the economy weakened in the second half of 2008, according to a report by Challenger, Gray & Christmas that found tech job losses last year were the highest since 2003.
Companies in the telecommunications, computer and electronics industries announced 186,955 job cuts in 2008, a 74 percent increase from the 107,295 job cuts recorded in 2007, according to Challenger, an outplacement firm.
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It was the most jobs the industry had lost in one year since 2003, when 228,325 layoffs were announced as the fallout from the dot-com burst wound down.
The job cuts accelerated sharply in the second half of the year. While 50,989 cuts were announced between January and June, just 135,966 cuts were announced from July to December.
In Rhode Island, technology has turned out to be one of the more resilient industries in a state with double-digit unemployment rates.
The information sector, which includes most tech workers, lost just 200 jobs in 2008, according to the R.I. Department of Labor and Training. By comparison, retailers cut 4,600 jobs and manufacturers shed 3,800 workers.
In addition, the tech industry has known much harder times in recent memory. The industry lost more than 1 million jobs from 2001 to 2003, according to Challenger.
Unfortunately, the job cutting appears to be continuing, with high-profile layoffs announced last month by Microsoft, IBM, Intel, Advanced Micro Devices and Electronic Arts, among others, the firm said.
“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,” John Challenger, the CEO of Challenger, Gray & Christmas, said in a news release.
However, Challenger said he does not expect to see job cuts in tech reach the same levels they did in 2001-2003. “After the dot-com bust, technology companies in all disciplines were a lot more cautious and avoided the pitfalls of over-hiring that contributed to record downsizing in 2001 and 2002,” he said.
Challenger also noted that demand for new technology still exists, although it has taken a hit because of the recession.
“What technology workers are most likely to find in this job market is an increased number of contract or contingent opportunities, which are not ideal, by any means, but at least provide a chance to prove themselves and possibly turn the position into a permanent, full-time arrangement,” he said.
“Tech workers who remain in demand right now are those who have cross-discipline knowledge and experience,” he continued. “For example, an IT professional with accounting and finance skills will be better positioned than someone with only programming skills. The other key to surviving a downturn, and this is true in any industry or occupation, is having the ability to adapt to rapidly changing situations.”
