Q2 Tech Cuts Surge Amid Slowing PC Sales

Job cut announcements in the technology sector more than doubled during the quarter ending June 30, rising to the highest level in a year, according to a special semi-annual report on tech-sector layoffs released Tuesday by global outplacement firm Challenger, Gray & Christmas, Inc.

Between April and June, employers in the computer, electronics and telecommunications industries announced plans to cut 20,491 jobs from their payrolls.  That is 144 percent more than the 8,392 job cuts announced in the first quarter of the year and the highest quarterly total since the second quarter of 2012, when technology firms reported plans to cut payrolls by 39,164.

The second-quarter surge was led by computer firms, which saw job cuts increase 365 percent from 3,526 in the first quarter to 16,404 in the latest quarter.  Electronics firms also increased the pace of job cutting in the second quarter, announcing plans to eliminate 2,344 jobs, up 68 percent from 1,395 in the first quarter.

Despite the dramatic increase in tech-sector job cuts last quarter, the overall pace of downsizing has slowed from a year ago.  Through the first six months of 2013, technology employers announced 28,883 job cuts, which is 44 percent fewer than the 51,529 layoffs recorded in the first half of 2012.

Get the full report here.


Telecommuting Could Save Time, Money Created by Monster Commutes

With a new report detailing the growing cost of daily commuting to and from work, one workplace authority wonders if it is time for the nation’s employers to make a serious commitment to expanding the use of telecommuting strategies.

“Right now, a very small fraction of the nation’s workers who could viably work from home on a regular basis are actually doing so.  By not expanding the use of telecommuting, employers are negatively impacting the environment, worker productivity, job satisfaction and, most importantly, their bottom lines.  And, it is not a lack of technology or other resources that is holding back this expansion.  It is simply a lack of vision, a shortage of trust and an irrational adherence to antiquated notions of how and where work should be done,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.

The call for increased telecommuting comes on the heels of a new report from the Texas A&M Transportation Institute, which revealed that increased traffic congestion is forcing the nation’s workers to build in extra time to their daily commutes to the tune of $121 billion in wasted time and fuel in 2011.

The longest commuting times are found in Washington D.C., where it takes drivers three hours to reach a destination that would be 30 minutes away with no traffic.  On average, commuters are giving themselves one hour for what should be a 20-minute drive with no traffic. Continue reading

Technology Sector Cuts Surge in 2012

Planned layoffs that will impact 30,000 workers at computer giant Hewlett-Packard helped push job cuts announced by technology-sector firms to their highest level in three years, according to a report on tech-sector downsizing released Monday by global outplacement firm Challenger, Gray & Christmas, Inc.

Technology firms, including those in computer, electronics, and telecommunications, combined to announce 51,529 job cuts in the first half of 2012, a 260 percent increase from the 14,308 cuts announced during the same period a year ago.  The midyear total is, in fact, 39 percent higher than the 2011 yearend total of 37,038.  It is the largest midyear total since 2009, when the sector announced 118,108 job cuts in the first six months of the year.

The surge in tech-sector job cuts occurred amid an increase in overall job cuts.  However, the 283,091 job cuts announced across all industries in the first half of 2012 were up just 15 percent from the 245,806 total industry job cuts at the same point last year.

Due primarily to the large job-cut announcement by Hewlett-Packard, the computer industry led the way in first-half job cuts with 34,380.  That marks a substantial increase from a year ago, when computer firms announced just 3,178 job cuts from January through June.  The computer industry alone announced more than twice as many job cuts in the first half of 2012 than in all of 2011 (14,677).

Read the full report here.

Fewer Women Holding Top Jobs In Tech

A new study out this week reveals a glaring lack of women in senior technology positions at U.S.companies.  The survey by technology outsourcing and recruiting firm Harvey Nash Group found that women accounted for just nine percent of the nation’s chief information officers, down from 11 percent last year and 12 percent in 2010.  Women are not exactly flocking into the top spot at technology firms either, according to tracking of CEO turnover by Challenger, Gray & Christmas, Inc.  Last year, there were 184 CEO departures at U.S.-based technology firms.  Of the 166 departure announcements in which the replacement CEO was identified, only six were women.  So far this year, just four women have been named as replacement CEOs for the 57 CEO departures announced in the technology sector through April.  The lack of women in the top technology positions may only worsen in the years to come, due to the relative lack of women pursuing tech-related degrees.   The latest available data from the NationalCenterfor Education Statistics show that the percentage of women earning computer and information sciences degrees has actually declined over the last two decades.  In 1992-93, 7,047 women earned 29 percent of the 24,557 bachelor’s degrees awarded in the field of computer and information sciences.  Women represented 28 percent of the 9,530 earning master’s degrees in the same field.  In the class of 2009-10, women accounted for just 18 percent of those earning bachelor’s degrees in computer and information science.  Meanwhile, the number of women earning master’s degrees in this field went from about 2,600 in 1993 to 4,900 in 2010.  The number of men earning master’s degrees expanded by more than 6,100 over the same period, growing from about 6,900 in 1993 to just over 13,000 in 2010.  Could a lack of women pursuing technology degrees lead to labor shortages in the near future? What can schools do to lure more women into science and technology educational tracks? What can companies do to address the dearth of women in technology leadership roles within their organizations?

2011 Tech Cuts Sink To Lowest Level Ever

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Despite a surge in tech-sector downsizing in the second half of 2011, the number of job cuts announced by these firms last year plunged to the lowest level ever recorded in tracking going back to 1997, according to the latest report on technology sector job cuts released Monday by global outplacement firm Challenger, Gray & Christmas, Inc.

Technology firms, including those in the computer, electronics and telecommunications industries, announced a total of 37,038 planned job cuts in 2011, down 21 percent from 46,825 in 2010.  The year-end total was down 79 percent from the recent peak of 174,629 recorded in 2009, when the recession was at its worst.

The decline in technology job cuts occurred as overall job cuts increased.  The number of job cuts announced across all industries rose 14 percent from 529,973 in 2010 to 606,082 in 2011.  The technology sector accounted for 6.1 percent of the 2011 total.  That is the lowest percentage of tech-sector cuts on record, falling from last year’s record low of 8.8 percent.

Technology job cuts did surge in the second half of 2011, raising concerns about whether the upward trend will continue into 2012.  From January through June, tech-sector job cuts totaled 14,308.  Job cuts jumped 59 percent to 22,730 between July and December.  That was up 99 percent from the 11,450 tech-sector job cuts announced during the same period in 2010.

Most of the second-half surge in the technology sector came from firms in the computer industry.  After announcing just 3,178 job cuts in the first half of 2011, computer firms announced planned layoffs totaling 11,499 in the second half of the year; a 262 percent increase.

“The second-half surge notwithstanding, the technology sector is definitely among the areas of the economy enjoying the fruits of recovery.  The 22,730 announced by these employers over the last six months is still relatively low, compared to recent years.  Several trends in the sector, including the advancement of cloud storage and the push to develop more portable computing devices, such as tabs and smartphones, is helping to create and protect jobs in the sector,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

According to the latest data from the Bureau of Labor Statistics, payrolls at of computer and electronics manufacturing firms saw a net gain of 13,100 jobs in 2011, bringing total employment to 1,124,000.  Meanwhile, employment at companies providing computer systems design and related services increased by 60,200 to 1,525,100.

Not every area in the technology sector saw employment increase.  For example, payrolls at firms categorized by the Bureau Labor Statistics as data processing, hosting and related services shrank by 2,100 to 238,900.

“The technology sector is in a constant state of flux.  This is not secret to professionals in the industry who have, over the years, seen many jobs move overseas.  Those left behind who neglected to update their skills to keep up with the rapidly changing demands of the industry are undoubtedly struggling to find employment even as the sector continues to experience a strong recovery,” said Challenger.

Technology jobs should continue to grow in 2012, but possibly at a slower rate, based on IT spending forecasts recently released by research firm Gartner.  It estimates that spending on information technology will rise only 3.7 percent.  That was down from an earlier forecast of 4.6 percent.

“The slowdown in spending could delay job creation.  However, even if job growth declines slightly in 2012, technology will still be among the strongest job markets.  Technology has become so widespread that job seekers no longer have to concentrate their searches on the coasts. Houston, for example, led the nation in technology job growth between 2010 and 2011.  According to the Nashville Technology Council, the Middle Tennessee region that includesNashvillehad more than 1,000 tech-related job openings in the fourth quarter,” noted Challenger.

“Additionally, because the technology industry and companies’ tech needs change so rapidly, there is increasing demand for technology consultants.  These situations provide more staffing flexibility for employers, while giving technology professionals the chance to work from anywhere and possibly on multiple projects for multiple companies,” he said.

Steve Jobs Resigns From Apple Inc.

Steve Jobs Resignation: The Importance of Succession Planning; More Computer CEOs Leaving In 2011
Steve Jobs, co-founder and long-time leader of tech-behemoth Apple Inc., announced his resignation yesterday evening, naming COO Tim Cook his replacement. Rumors of Jobs eventual resignation have been circulating since Jobs took a leave of absence in January for health reasons and Cook took over day-to-day functions at that time. Apple operations, therefore, will most likely not change, as the succession plan has been in place for some time. However, stocks were marked lower on Thursday on account of the news. Jobs’ resignation differs from departures from other technology giants, such as Bill Gates’ from Microsoft in 2006, in that Jobs is remaining with the company in leadership roles as Chairman of the Board, director and Apple employee, according to his statement. However, many tech firms, such as Microsoft, HP and Yahoo saw declines after their iconic leaders stepped down. Through July, 64 computer industry CEOs have left their posts, compared to 50 during the same period last year. What can investors and consumers expect with news of the resignation? How important is succession planning for a company’s overall health? What can employees expect during a management change?


Tech Sector Job Cuts Plunge 60%


In past years, the 6,500 job cuts announced this week by Cisco Systems probably would not have stood out, particularly in a sector that at one time commonly saw job-cut events numbering in the tens of thousands. This year, however, the Cisco announcement stands out as the largest job cut of the year in a sector that is experiencing record low downsizing.

Technology firms announced just 14,308 job cuts in the first half of 2011, a 60 percent drop from the 35,375 cuts announced during the same period a year ago, according to a special report on technology-sector job cuts released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.

While first-half job cuts announced by telecommunications, electronics and computer firms were up slightly from 11,450 job cuts announced in the final six months of 2010, the increase probably does not signal a resurgence in tech-sector downsizing.

“The Cisco cuts notwithstanding, the overall health of the technology sector remains very strong. In fact, it is one of the best performing industries in the economy at the moment. It is highly unlikely that planned layoffs in the second half of the year will be heavy enough for the year-end total to surpass last year’s record low 46,825 job cuts,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

The 14,308 tech-sector job cuts announced so far this year represent just 5.8 percent of the 245,806 job cuts announced across all industries. In contrast to the 60-percent decline in tech-sector job cuts, the overall job-cut total for the first half of 2011 is down only 17 percent from last year’s six-month total.

The biggest decline in tech-sector job cuts was experienced by computer firms, which saw the number of planned layoffs plunge 81 percent, from 16,964 in the first half of 2010 to 3,178 this year. The only other industry to see a bigger drop in layoffs this year is pharmaceutical, where job cuts declined 86 percent from 34,987 to 4,771.

Job cuts announced by telecommunications firms dropped 57 percent from 16,005 in 2010 to 6,813 this year. Firms in the electronics industry were the only segment of the tech sector to see an increase in job cuts. Layoffs among these employers increased 79 percent from 2,406 a year ago to a 2011 six-month total of 4,317, which is still very low by historical standards.

Prior to the Cisco workforce reductions, which will be counted in Challenger’s third-quarter tally of tech-sector job cuts, the largest reported layoff this year came from telecommunications firm Qwest Communications, which announced 1,800 planned job cuts in March.

“As many sectors outside of government continue to see relatively low downsizing activity, the tech sector is one of the few areas actually adding workers. Through June, companies in the sector announced plans to add nearly 26,000 workers, which represents just a small portion of actual hiring, since most employers do not formally announcing hiring plans,” noted Challenger.

According to payroll figures from the Bureau of Labor Statistics, employment within computer systems design and related services has grown by 42,000 since the beginning of 2011. Computer and electronics manufacturers have added more than 12,000 workers to their payrolls.

Meanwhile, according to a survey by IT job site Dice.com, the hiring should continue into the second half of 2011. The site’s June survey of nearly 900 hiring managers and recruiters, found that 65 percent anticipate hiring more technology professionals in the second half of 2011 than the preceding six months.

An article appearing last June in information technology industry publication, InfoWorld, identified some of the IT jobs with the best growth potential. Making the list were business architect, data scientist, social media architect, mobile technology expert, enterprise mobile developer and cloud architect.

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Get the full report: Historical Data