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Layoffs pick up in U.S. technology sectors
Company News (Yahoo) ^ | Tue Oct 5, 2004 05:48 PM ET | Emily Chasan

Posted on 10/06/2004 6:14:14 AM PDT by jb6

NEW YORK, Oct 5 (Reuters) - The trouble may not be over for the long-distressed high technology sector, as statements and reports on September job cuts indicate a surge in layoffs.

Whether this is the tipping point for a long-troubled sector, or a blip in the path toward steady growth remains to be seen, analysts said.

In the month of September alone, layoffs in the computer and telecommunications industries reached a six-month high, according to a monthly report by employment services firm Challenger, Gray & Christmas Inc., squelching hopes job cuts were slowing in these industries.

The computer industry lost 24,300 jobs in September, compared with 5,004 in August, while the long-troubled telecommunications sector lost 10,982, compared with 5,617 in August, the report said.

Both industries, which have had higher than average job cuts since the dot-com bubble burst in 2001, were thought to be hitting a turnaround in overall job loss, since the last six months had relatively stable figures. But the surge in announcements this month, combined with a tough pricing market and soft demand that companies said in their statements may mean more job losses in the future.

"It's a sign that there is some consolidation going on, there are companies that haven't met their numbers and perhaps that demand is sluggish," said Challenger Gray chief executive John Challenger.

He said the surge in layoffs this month was surprising given that, "generally, tech has had a pretty good run this year," he said.

Earlier this month computer services company Electronic Data Systems Corp. (EDS.N: Quote, Profile, Research) said it could cut up to 20,000 jobs over the next two years and other companies like communications chip maker Agere Systems Inc. (AGRa.N: Quote, Profile, Research) and software maker Computer Associates International Inc. (CA.N: Quote, Profile, Research) said they would cut 500 and 800 jobs, respectively. Both Agere and Computer Associates booked millions in charges for the layoffs, but said they were under pressure to lower costs in statements.

In the telecommunications sector, offshore outsourcing has been a significant worry for job holders, as call centers open every month and more and more layoffs are announced.

In Georgia, CWA Local 3250 President Roy Hegenbart, whose union represents AT&T Corp. (T.N: Quote, Profile, Research) workers said he has seen the rate that jobs are cut double in recent months.

"We used to have, just in this area, over 1600 people, we're down to about 600 now," he said, blaming outsourcing and soft demand for local and long distance services.

Motorola Inc. (MOT.N: Quote, Profile, Research) , also announced in September that it would cut 1,000 jobs, or almost 1 percent of its work force, saying the company was facing an increasingly competitive market.

Job opportunities in high tech may also be shrinking, according to the Challenger Gray report. In September, both the computer and telecommunications industry announced zero new jobs.

Challenger said this month's report will make him take another look at the sector.

"There can always be some slowdown," he said. "I think it's certainly something that's worth watching, whether or not tech spending is slowing.


TOPICS: Business/Economy; Culture/Society; Extended News; Government; Miscellaneous
KEYWORDS: economy; it; jobs; layoffs; legionofdoom
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Crap, here we go again. I was hoping there might be some light, somewhere. I'm so sick and tired of this. Hope I can last long enough to finish my grad degree and leave tech. Tech in America is dieing a slow and molding death. Still, I've seen job ads for Americans to work in China and India for their tech market.
1 posted on 10/06/2004 6:14:14 AM PDT by jb6
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To: jb6

Friday the jobs numbers will include an UPWARD revision for the last year. EXPECT good news on Friday, just b4 the next debate.


2 posted on 10/06/2004 6:59:13 AM PDT by Mister Baredog ((Part of the Reagan legacy is to re-elect G.W. Bush))
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To: Mister Baredog

I hope so, but do those numbers mean anything to IT? Sorry to be biased, but that's my field. If everything else is growing but my skill set in demand, that leaves me and my family in the funk.


3 posted on 10/06/2004 7:12:43 AM PDT by jb6 (Truth = Christ)
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To: jb6

I've been in the tech sector for 15+ years, and the last three have been devastating. But, I am now working, and at my company there is actually some movement (people leaving for better offers.) I haven't visited the job sites in quite a while, but my feeling is that things are continuing to improve. Also, many of the lemming VPs are finding out that outsourcing is a very foolish practice, and that work is starting to stay home.


4 posted on 10/06/2004 7:26:50 AM PDT by frankenMonkey
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To: frankenMonkey
there is actually some movement (people leaving for better offers.)

Yup. Here too. It would be interesting to somehow compare layoffs of tech workers in high cost states compared to low cost states.

5 posted on 10/06/2004 7:37:12 AM PDT by VeniVidiVici (Not Fonda Kerry in '04 // Vets Against Kerry)
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To: frankenMonkey

Another silver bullet that turned out to be lead. They will never learn. Remember xtreme programming? What a crock. Lets screw planning and engineering and just write code, yeah, that will solve everything. Why waste time figuring out what you want to do and how to do it, just throw code out. When I was searching for a job, I spoke with several Russian companies (I'm rather fluent in the language) and they still use this idiocy. I told them that this was a pipe dream concept. They didn't take that to well.


6 posted on 10/06/2004 7:38:55 AM PDT by jb6 (Truth = Christ)
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Comment #7 Removed by Moderator

To: KC_Conspirator

Ssssh, not so loud, people will call you an "isolationist" and not a "global thinker".


8 posted on 10/06/2004 7:58:09 AM PDT by jb6 (Truth = Christ)
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To: Mister Baredog
EXPECT good news on Friday, just b4 the next debate.

New Labor Department Report Reflects Bush Administration's Lack of Seriousness...
Jobs worth $ 210 billion to be outsourced to India in 2005

9 posted on 10/06/2004 8:03:11 AM PDT by Willie Green (Go Pat Go!!!)
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To: jb6
EDS is in deep trouble because it priced its billion-dollar Navy contract below cost. It also did the same thing on two or three other large contracts.

EDS has been poorly managed for the last decade and is now paying for it.

10 posted on 10/06/2004 8:08:02 AM PDT by sinkspur ("I exist in the fevered swamps of traditional arcana. "--Cardinal Fanfani)
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To: jb6

Right On Brother!


11 posted on 10/06/2004 8:33:41 AM PDT by ghitma (MeClaudius)
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To: jb6

Interesting article you posted. We were just chatting about this jb6 on another thread. I hope that some of the tech people now in school also are taking general business courses. The software guys don't understand deadlines or a necessity to make a profit. Having some business education as to how a company operates would be a huge cross/selling plus. I now look for resumes with these combined skills and it is VERY rare to find but to me, worth its weight in gold.

It's a free global market economy. Any buyer of anything is going to look for the best price for the best service, period. The prices in India and China are still low enough for companies to see value in sourcing tech. However, this has begun changing and the pricing over there is going up at a quick pace. As it does, companies here in the States will see less value of dealing with the headaches of it over the savings and a balace will be acheived, then a regrowth of this sector. I would say we are about two years away from tech jobs really beginning to be in demand again.

A lot of guys I know who are programmers who worked during the boom and were use to six figure salaries and being catered too are not use to working for half the amount and being put under tight deadlines. As the owner of a tech business I also have to work harder and smarter for less money, so we are all in the same boat.


12 posted on 10/06/2004 9:18:20 AM PDT by quant5
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To: jb6
Tech in America is dieing a slow and molding death.

I respectfully disagree. If you are flogging commoditized skills, then yes, demand is slumping and will taper off for the forseeable future. If you are adept at continuously finding a niche however, then breaking $100-150K gross including benefits per year is reasonably feasible. I'm at the upper end of that range, and fully expect to gross significantly more next year in my business.

As a general rule of thumb, as long as you let someone else do the selling and marketing for you, you are a commodity. That includes going into the contracting market and working through recruiting firms.

Before firing off retorts, hey, I don't make the rules, I just play by them. You want to complain to someone about this, complain to Mr. Market.

If you want to learn how to sell and market your skills, start by offering to help your company's sales teams with their pre-sales work. You can learn a lot by putting together presentations, proposals, and project plans. Read up on sales and marketing. Start making pitches yourself if you can, on "throwaway" deals that are too small for the sales team to spend time upon. Network, and keep a systematic record of who you meet, what they do, what they are interested in, and keep in regular contact with them.

In the IT world, the one position that will never be outsourced is sales. Even in the depths of the Depression, great sales people were still pulling down great comp plans. If you can cut code, design software systems, and sell, you can not only start your own business, you can practically write your own ticket in many big IT firms.

13 posted on 10/06/2004 9:29:47 AM PDT by tyen
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To: Willie Green
I'm amazed, a layoff thread not posted by WG!

Wake up WG, doom and gloom just isn't the same without you.

14 posted on 10/06/2004 11:00:36 AM PDT by John O (God Save America (Please))
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To: jb6
I was hoping there might be some light, somewhere.

The "light" is now located in Red China and India, sorry.

15 posted on 10/06/2004 11:03:46 AM PDT by Walkin Man
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To: Mister Baredog
Friday the jobs numbers will include an UPWARD revision for the last year. EXPECT good news on Friday, just b4 the next debate.

What do you mean upward revision for last year? Do they revise for the entire last year in their October 2004 report?

I'm still not sure what kind of news to expect for the October numbers. A solid 100,000 and a steady 5.4 percent would help the "optics" of the situation.

16 posted on 10/06/2004 11:04:57 AM PDT by hawkaw
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To: tyen

"If you can cut code, design software systems, and sell, you can not only start your own business, you can practically write your own ticket in many big IT firms."

Exactly. That and have an attitude of helping grow revenues, not simply write your own code and treat a business like a project. People like you with the above mentioned understanding and attitude are worth 6 figures. Problem is, your amoung the rare 5% of the I.T. population who share this sentiment.


17 posted on 10/06/2004 11:08:45 AM PDT by quant5
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To: jb6

I know what you mean. I lost my IT position of 12 years back in 2001. Making only about half of what I was making back then. Do I blame the government? No! It's part of life I am working my way back up in another career. Great thing about this country is that you can do these type of things and make it.


18 posted on 10/06/2004 11:09:32 AM PDT by reagandemo (The battle is near are you ready for the sacrifice?)
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To: jb6; Mister Baredog

Numbers or not the IT field is still hurting. I have seen a mrked decrease in jobs out there and have more then a few friend either out of work or underemployed. One is a MCSE with CCNA and all he has been able to find in the 4 months since his layoff is a Service tech at Best Buy for $11 with no benefits. It is ruff out here.


19 posted on 10/06/2004 11:09:36 AM PDT by TXBSAFH (Member of 3rd Pajamahadeen Division, 2nd Boxer Shorts Brigade, 4th Bunny Slipper Battalion)
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To: quant5
"That and have an attitude of helping grow revenues"

Also have an organizational awareness, know how to make things more efficient at lower cost. Know how get the most out of your existing product/service lines. Know where to innovate smartly, and where/why the pain threshold is for company investment toward this. Share. These things will keep you employed.

20 posted on 10/06/2004 11:12:44 AM PDT by paulsy
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