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Business

July 28, 2013

Tech-sector job cuts surge, driven by shift toward tablets

Job cuts driven by Americans’ shifts toward tablets and cloud computing could only be the beginning of overhauls in the nation’s tech sector this year.

A semi-annual report released in July by Chicago-based global workforce firm Challenger, Gray & Christmas found that during the second quarter this year, from April through June, the nation’s tech companies announced plans to cut 20,491 workers, a 144 percent surge from the previous quarter.

Computer firms, or organizations that manufacture PCs and other desktop computers, led the way with 16,404 cuts announced — a 365 percent increase from first quarter cuts of 3,526 — and planned cuts by electronics firms jumped 68 percent from 1,935 in the first quarter to 2,344 in the second quarter. For the purpose of the report, electronics firms are those that create computer component parts, semiconductors or other segments for electronics.

While the figures appear dire, they’re actually an improvement from a 2012 second quarter, which saw a total of 39,164 lose jobs, including 32,072 computer workers and 977 electronics employees.

If personal computer sales or the number of clients using data storage companies to save digital information lags throughout the year, the nation should expect to see even more jobs lost, said Challenger Gray & Christmas CEO John Challenger.

He noted that Hopkinton, Mass.-based data storage provider EMC Corp. announced 1,000 job cuts in May. He also said Armonk, N.Y.-based IBM is expected to cut around 8,000 employees worldwide after first-quarter earnings failed to meet expectations.

“The second half of the year could see even more job cuts in the technology sector as at least one forecaster cut its forecast for global IT spending this year in half due to slowing PC sales,” Challenger said in a news release. “Stamford, Conn.-based research firm Gartner recently recalibrated its spending outlook from an originally reported 4 percent gain to a less optimistic 2 percent.”

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