Tech sector hit hard with job cuts

The technology sector has trimmed its work force by 10 percent over the last two years, with manufacturing jobs bearing the brunt of the cuts, according to a new report.

The American Electronics Association (AEA), a trade group that represents 3,000 technology companies, said the U.S. high-tech industry shed about 560,000 jobs, reducing the number of jobs from a high of 5.7 million in January 2001 to 5.1 million in December 2002.

The AEA's Tech Employment Update also found technology employment dropped every month during 2002.

"The turbulent economic climate facing the nation's high-technology industry over the past two years has had a dramatic affect on technology employment," AEA CEO William Archey wrote in the report.

The high-tech manufacturing industry, once the country's largest manufacturing sector, shaved 415,000 jobs and has been replaced by food product and transportation equipment manufacturers as the leading employers. Within that sector, electronics manufacturing lost the most jobs, followed by the computer equipment and computer manufacturing industries.

One bright spot in the study was software services, which managed to add 5,300 jobs in the past two years. However, that number makes up for less than 1 percent of the hundreds of thousands of jobs lost during that time. The software and computer-related services sector managed to hold its own, cutting just 9,300, or less than 1 percent of the jobs over the past two years.

The report's release comes on the heels of grim employment news by some major technology companies. Last week, Intel said in a financial report that it had cut 700 more jobs last year than it planned to. On Monday, Gateway said it had begun trimming 17 percent of its work force and closing some stores. Also Monday, Applied Materials said it will lay off 14 percent of its staff, the latest in a series of job cuts at the company.