April 11, 2005 5:58 PM PDT

Tech industry slashing jobs again

Technology companies cut nearly 60,000 U.S. jobs in the first three months of the year, twice the number trimmed in the same period last year and the biggest loss of jobs in the sector since late 2003, according to a new report.

The telecommunications industry accounted for the bulk of the cuts, with more than 35,000 layoffs in the first quarter, said outplacement firm Challenger, Gray & Christmas, which issued the report Monday. The computer industry laid off about 16,100 workers.

The firm attributed the jump in job cuts to a surge in telecommunications mergers, such as the purchase of AT&T Wireless by Cingular Wireless.

The phone industry may continue to shed jobs. SBC Communications said recently that it would cut about 13,000 positions if its purchase of AT&T withstands government review. Meanwhile Qwest Communications' proposed buyout of MCI calls for the elimination of as many as 15,000 positions. Sprint's merger with Nextel is also pending.

The software industry is not immune either. Oracle cut about 5,000 jobs in the first quarter after gobbling up PeopleSoft.

The industry will come under increasing pressure this year as consumers and corporations take a tech-spending breather, the report predicted.

"Consumers and companies have been buying iPods, laptops, portable DVD players, cell phones, BlackBerries, etc.," said John Challenger, chief executive of Challenger, Gray & Christmas, in a statement. "Their technology cup is overflowing, which may lead to a cooling off period until a major technology breakthrough comes along."

1 comment

Join the conversation!
Add your comment
Basically Leveraged Buyouts
Buying up companies and then gutting staff is really just another form of a leveraged buyout. The acquired company is worth more dead than alive. What the purchaser is buying is some technology and a customer base, and removing a competitor. The people, buildings, copy machines, computers, etc. are just flotsam. The good people, the keepers, bailed out long ago as the crows circled and the stench of impending death began to permeate.
Posted by Stating (869 comments )
Reply Link Flag

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot



RSS Feeds

Add headlines from CNET News to your homepage or feedreader.