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 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 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.
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.
More information on the technology sector can be found at www.CRMindustry.com.