Survey: Tech job cuts up 12 percent
The technology job sector was hit hard during 2009, but there is hope, according to a survey that found job cutting slowed in the second half of the year.
The recession forced employers in the technology sector to announce 174,629 planned job cuts in 2009, a vast increase over 2008 numbers according to a report released Tuesday by Challenger, Gray & Christmas Inc., an outplacement consultancy that tracks job-cut announcements.
In 2008 there were 155,570 job cuts announced, 12.3 percent less than 2009’s total, which is the largest year-end total since 2005.
“The recession’s impact on the tech sector was inescapable. Even with the economy showing some nascent signs of recovery beginning the second half of year, many companies are holding off on investments in new technology,” said John A. Challenger, CEO of Challenger, Gray & Christmas.
Challenger also said that the impact of small businesses and start-ups struggling to obtain loans meant fewer opportunities for tech firms to expand their customer base.
Much of the increase in job losses was due to a “first-quarter surge” that saw 84,217 job cuts announced. But, cuts dropped to 33,891 in the second quarter and to a six-quarter low of 24,808 in the third quarter. Job cuts spiked to 31,713 in the fourth quarter, but the pace for overall job cuts for the second half of the year was down 52 percent from the first half.
“It’s going to be a slow climb out of this recession, but computer and electronics firms should be among the first to see the turnaround, as companies try to postpone hiring by achieving productivity gains through technology,” Challenger said.
A 6.6 percent increase in spending on information technology is expected in 2010, after it fell by 8.2 percent in 2009, according to an outlook released by Forrester Research. Technology spending should also be helped by efforts to move the health care industry into the era of electronic health records.