Correction, 12:50 p.m. PST: This story initially mischaracterized a statement made by John Challenger regarding the severity of recent tech-related job cuts. He does not expect them to be as severe as those during the dot-com bust. Also the percentage figures cited within the various sectors reflect the increase in layoffs last year compared with 2007, and not the percentage of jobs cut.
Job cuts in the tech sector increased 74.2 percent in 2008 compared with the previous year, as the industry was battered by an unrelenting wave of layoffs, according to a report released Thursday.
Last year, 186,955 jobs in the telecommunications, computer, and electronics sectors were slashed, according to the report by outplacement consulting firm Challenger, Gray & Christmas.
And the bulk of those cuts, nearly three-quarters, came during the last six months of the year, the report noted. That drove the tech sector to unemployment levels not seen since 2003, according to the report.
"Through the first half of 2008, it looked as though the tech sector might be one of the few areas of the economy to remain resistant to recessionary pressures. However, the economy's continued slide here and overseas saw consumer and corporate demand for technology products and services drop rapidly, and these firms were suddenly under pressure to make significant cost-cutting moves," John Challenger, CEO of Challenger, Gray & Christmas, said in statement.
Within the various sectors in tech, electronics firms saw losses of 73,447 jobs, an increase of 89.7 percent over the previous year; the telecommunications industry saw an increase of 72.5 percent; and cuts in the computer industry were up 61.3 percent.
And in the Silicon Valley, for just the month of December, the unemployment rate rose to 7.7 percent in Santa Clara County and 5.9 percent in San Mateo County. Nationwide, the unemployment rate reached 7.2 percent for the month of December.
And the forecast for 2009 is not looking much better.
"Cuts could reach even higher in 2009, as there is no evidence yet that the economy has hit the bottom of this downward portion of the cycle. We almost certainly will not see a repeat of the 2008 first quarter, in which tech cuts totaled just 17,345," Challenger said in a statement.
He added, however, he does not expect technology-related job cuts to be as severe as the dot-com bust, when 36 percent of all layoffs across a wide swath of industries came from tech.