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.
That's correct, the U.S. fiscal year ends in Sept, the revision is for the full fiscal year, jusy as monthly figures are updated after the initial report, so is the annual report.
bump
Would your solution be something other than allowing market forces to work?
The bursting of the high-tech bubble was a sad thing, it cost me a lot too.
Hang in there, the economy of the U.S. is growing at a healthy rate, things are improving. I hope your situation and your FRiends improves.
If we don't win the WOT it won't matter much anyway, 9/11 cost us 1 million jobs in 3 months. What would a nuke in LA or NY do?
By the way...
That is a felony.
If the source wasn't Reuters, I might believe it.
I am just telling you what I know and hear. FYI. Myself and freinds from other offices all in It meet at apub every 6 weeks or so and talk shop compare notes and network. This is where I hear alot of people worried about their jobs. It is a social occasion but the eyes are on the ball if you know what I mean.
The magnitude of the low-ball amount suggests the former.
BTW, EDS is refusing to execute certain contract line items unless the contract is renegotiated to cover the higher costs.
1. Web Site needed product added to it. Only the tech guy knows how to do that.
2. User in the art department lost communication with shared laser printer. Tech guy fixed problem by rebooting computer.
3. User says computer is beeping at her and her screen has gone blank. Tech guy discovers that she accidentally kicked the power cord out of the wall. The beeping was her UPS going on battery power. The screen went blank when the battery died after 5 minutes. Problem fixed by plugging computer back in.
4. User claims to not be able to access the company database. Tech guy discovers that the user failed to enter their password when logging onto the network.
While these are simple problems, without a tech guy in the building they would have had to wait until their "computer guy" could come out and see them, which could have taken hours.
For icing on the cake, our tech guy receives phone calls from our customers (we are an imprinted t-shirt company, not a computer services company) on a regular basis asking for advice and help.
"What kind of laptop should I get?"
"What kind of printer should I get for my company?"
"Should I upgrade to XP?"
"Who should host my web site?"
Etc. Etc. Ad nauseum.
Seriously, as long as the majority of computer users expect their computers to be like their refrigerators, there will be tech jobs.
EDS effed up. But, the contract had few contingency clauses and unbelieveable project schedules. But EDS got tired of losing every federal bid to IBM and CSC, so it priced so close to the line there was no margin for error.
"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."
Very good. Yes indeed and agreed.
Does anyone really think that the market bubble was not accompanied by an employment bubble?
For God's sake, I know an MD, an ankle specialist! who dumped his practice in '99 in order to cash in on the great internet. Yes, he's back to the troublesome and tiring business of fixing athlete's ankles in order to pay for his mansion, trophy wife, and five cars.
Human nature, upon which the free market is based, has played out magnificently in these last five years. Anyone want to bitch about the internet? Then why are we beating ourselves up over hyped, unrealistic expectations?
Now, how you gonna make your fortune?
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