The rate of tech job losses dipped 31 percent in the third quarter, according to a report released Oct. 3 by outplacement firm Challenger, Gray & Christmas Inc.
Third-quarter job cuts in the high-tech sector—including telecommunications, electronics, computers and e-commerce—totaled 91,450, down 31 percent from the second quarters total of 132,953 lost jobs.
Does the slowing rate of tech job losses mean the economy is healing, or simply that there are fewer jobs left to cut? Quite possibly the latter, according to Challenger, Gray & Christmas CEO John Challenger. "Some companies may be down to bare bones now and cannot afford to eliminate any more jobs without going out of business," Challenger said in a statement. "Some major employers still have a lot of room to make cuts and may be forced to do so soon if capital spending does not increase."
Indeed, Challenger, Gray & Christmas tracking has in the past indicated that the odds of being downsized in the fourth quarter of a given year increase at least 38 percent. Because there has been no significant upturn in capital spending and earnings remain under pressure, this year will likely be no different, a recent Challenger, Gray release noted.
"It is impossible to say if falling technology job cuts indicate that business is finally turning around for this weakened sector," Challenger said in the statement. "It is probably too early to celebrate. … While it appears that job cuts in telecommunications are trending downward, we have been surprised in the past. One month there are very few job cuts, and the next month there is a flood of cuts, which is to be expected in this volatile economy."
The third-quarters figure of 91,450 tech job cuts was 57 percent lower than the 213,420 tech jobs that were lost in the third quarter of 2001. This years third-quarter figure was the lowest quarterly total of tech job losses since the fourth quarter of 2000, when high-tech firms shed 43,175 jobs.
High-tech job cuts represent one-third of all job cuts--1,004,617--announced so far this year, according to the study. The biggest declines in tech job cuts came in the telecommunications sector, which witnessed a 52 percent rate drop, from 83,318 in the second quarter to 39,717 in the third quarter. There were 6,956 telecom job cuts in September—the lowest monthly figure for the industry since November 2000 (2,358).
Electronics is the one high-tech industry where job cuts sped up. The rate of electronics job losses jumped 175 percent, from 7,159 in the second quarter to 19,716 in the third quarter.