Tech Could Be Worse -- and Has Been
In the wake of layoffs, people wring their hands and think that the sky is falling. Sometimes historical perspective can be useful, and as a report from outsourcing firm Challenger, Gray & Christmas notes, as bad as it seems now, it’s been far worse.
According to their figures, high tech companies cut 186,955 jobs last year. Take electronics, computers, and telecom together, and the quarterly pattern is interesting:
| Quarter | Total Job Cuts |
|---|---|
| Q1 | 17,345 |
| Q2 | 33,644 |
| Q3 | 69,654 |
| Q4 | 66,312 |
The cuts were almost doubling quarter-to-quarter through Q3. And, never accused of being a doe-eyed optimist, I don’t see that last quarter as a real slowdown of the job losses. Neither does the company:
“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,” said [firm CEO John A.] Challenger.
But telling in an odd way was the headline to the job numbers release: Technology Job-Cuts Reach Five Year High.
Five years? Is that all? Apparently it is. Challenger Gray also had a table of annual job-cut announcements for high tech from 2001 through 2008.
| Year | Number of Jobs Cut |
|---|---|
| 2001 | 695,581 |
| 2002 | 468,161 |
| 2003 | 228,325 |
| 2004 | 176,113 |
| 2005 | 174,744 |
| 2006 | 131,181 |
| 2007 | 107,295 |
| 2008 | 186,955 |
Seen in context, the 2008 number is less stunning. Will things get worse? Oh, I suspect so. But the biggest danger is for businesses to pay such close attention to the reports of doom and gloom that they over-react and make choices that leave them unable to recover when the economy eventually turns around.
Erik Sherman is a freelance journalist whose work has appeared in Newsweek, the New York Times Magazine, Technology Review, the Financial Times, Chief Executive, and other publications. Follow him on Twitter.
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