"Study Finds Dramatic Loss of Tech Jobs"

"Study Finds Dramatic Loss of Tech Jobs"
CNet (10/18/04); Frauenheim, Ed

Announced technology job cuts have increased significantly in the last three months, rising 60 percent from the second quarter to hit 54,701, a 14 percent increase from the third quarter of 2003, according to a new report from Challenger, Gray & Christmas. Approximately 56 percent of the cuts--a total of 30,624 jobs--stemmed from computer companies. Challenger, Gray & Christmas CEO John Challenger attributes the cuts to a lack of pricing power among tech companies. "Even as demand increases, most manufacturers and service providers are getting less money for each unit sold," he points out, leaving them with little choice but to trim costs to uphold robust profit margins. High-tech firms have thus far announced 118,427 job cuts this year, which represents 16 percent of the 724,320 job cuts across all sectors through Sept. 30, a 2.5 percent increase over second quarter figures. There have been a lot of conflicting reports concerning the IT job market: Meta Group expects as much as a 15 percent boost in IT personnel salaries over the next three years, while the U.S. Department of Labor estimates that payroll employment in computer systems design and related services increased 32,700 between September 2003 and September 2004 to total 1.14 million; on the other hand, IT professionals' confidence in the job market declined in September, and a recent ITAA report found that hiring managers have scaled back their ambitions for filling IT posts this year compared to last year. Challenger notes that demand is healthy for network and IT security specialists and tech support staff, but he expects a considerable amount of time to pass before the creation of tech jobs returns to late 1990s rates.

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