Tech-Sector Job Cuts Plunge 32% in 2013

February 3rd, 2014
in econ_news

TECH SHEDS 56,918; 11% OF ALL JOB CUTS

from Challenger, Gray & Christmas

After climbing to a three-year high in 2012, planned job cuts announced by firms in the technology sector declined by 32 percent in 2013 as employers focused on hiring in several growing areas, including big data, cloud computing and security, according to a semi-annual report on tech layoffs releasedMonday by global outplacement firm Challenger, Gray & Christmas, Inc.

Follow up:


United States-based employers in the computer, electronics and telecommunications industries announced 56,918 planned layoffs in 2013, representing 11.2 percent of the 509,051 job cuts recorded during the year. That was down from a 2012 total of 83,213, which was 15.7 percent of the 523,362 job cuts announced that year.

The heaviest job cutting occurred in the computer industry, where 35,136 workers were cut from payrolls. That was 24 percent fewer than the 46,164 computer-industry job cuts in 2012. Annual job cuts among electronics saw the biggest decline, plunging 42 percent from 14,191 in 2012 to 8,830 last year. Said John A. Challenger, chief executive officer of Challenger, Gray & Christmas:

The technology sector is one of the bright spots of the economy. While overall job cuts declined 3 percent last year, layoffs in technology fell by nearly one third. Furthermore, technology consistently ranks among the areas of the economy with the strongest potential for job growth in both the near term and over the long haul.

Meanwhile, sectors that can typically be counted on to be strong job creators, including pharmaceutical, health care, aerospace and defense, and financial services, all saw job cuts increase in 2013. Job cuts in health care increased 45 percent last year as hospitals and other health care providers adjusted to shrinking Medicare reimbursements and Medicaid cutbacks. Financial services saw increased cuts among investment banks as well as retail banks, where many institutions made deep cuts among the extra staff brought in to help handle record numbers of foreclosures and troubled-mortgage refinancing in the wake of the recession.

This is not to say there are not job opportunities in health care, financial services and even the increasingly budget-conscious federal government. Not surprisingly, however, the best and most numerous opportunities are related to technology occupations. In health care, programmers are needed for the further digitization of medical records. In finance, more and more security experts are needed. In the government, large portions of the information technology workforce are reaching retirement age.”

One area in the tech sector expected to experience strong job growth is big data. In a recent survey of IT decision makers by technology trade publisher IDG Enterprise, nearly 50 percent of respondents indicated they are planning or implementing big data projects in 2014.

A separate survey by one of IDG’s publications, Computerworld, found that 32 percent of companies expect to increase staffing in their IT departments this year. The jobs with the highest demand included programming/application development, technical support, networking, and mobile applications and device management. Not surprisingly, security also ranked among the top 10; the importance of which was reinforced by the recent spate of data breaches at Target, Neiman Marcus and Yahoo. said Challenger added:

The biggest challenge for technology companies, as well as non-technology companies hiring tech workers, is the growing skills gap. The pace of change in the sector is so rapid it is difficult to keep skills fresh. The IDG survey found that among the respondents planning big data projects in the coming year, 40 percent noted that finding people with the right skills will be a top challenge in implementation.

Unfortunately, tech skills are not easily learned. It would be very difficult, for example, for someone to make a transition from manufacturing or mortgage banking into information technology. It would basically require starting from scratch and in the time it takes to learn the skills that are in demand now, there is a strong likelihood that those skills will be out-of-date by the time they are mastered. As a result, the technology job-pipeline must rely heavily on college graduates and H-1B workers.

2013 TECHNOLOGY JOB CUTS

Q1

Q2

Q3

Q4

Total

Computer

3,526

16,404

7,962

7,244

35,136

Electronics

1,395

2,344

2,429

2,662

8,830

Telecom

3,471

1,743

3,674

4,064

12,952

TOTAL

8,392

20,491

14,065

13,970

56,918

 

 

2012 TECHNOLOGY JOB CUTS

Q1

Q2

Q3

Q4

Total

Computer

2,308

32,072

6,291

5,493

46,164

Electronics

3,113

977

3,290

7,811

15,191

Telecom

6,944

6,115

6,160

2,639

21,858

TOTAL

12,365

39,164

15,741

15,943

83,213

 

 

2011 TECHNOLOGY JOB CUTS

Q1

Q2

Q3

Q4

Total

Computer

1,887

1,291

8,809

2,690

14,677

Electronics

2,202

2,115

1,625

2,937

8,879

Telecom

4,552

2,261

1,627

5,042

13,482

TOTAL

8,641

5,667

12,061

10,669

37,038

 

 

 

ANNUAL TECH-SECTOR JOB CUTS

2003-2013

 

Total

% of All Cuts

2003

228,325

18.50%

2004

176,113

17.00%

2005

174,744

16.30%

2006

131,181

16.00%

2007

107,295

14.00%

2008

155,570

12.70%

2009

174,629

13.60%

2010

46,825

8.80%

2011

37,038

6.11%

2012

82,213

15.70%

2013

56,918

11.20%

 

Source: Challenger, Gray & Christmas, Inc.

 















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