MoneyWatch Tech

Tech Layoffs for Q1 2009: Mixed Signals

By Erik Sherman

Updated on: April 1, 2009 / 7:31 AM EDT / MoneyWatch

Just a week ago we saw the layoff numbers reported by Challenger, Gray & Christmas that showed a big jump in high tech for January and February. Now that we have complete data for the first quarter, there is some good news: the rate of layoffs is slowing. But the number of jobs lost still eclipses last year, and new high tech job creation isn't coming close to catching up.

Here are the numbers for March and the first quarter of the year in electronics, computer, and telecommunications, which roughly equals what we consider high tech:

Sector	January	February	March	Q1 2009
Electronics	11,050	11,065	11,500	33,665
Computer	22,330	3,960	5,290	31,580
Telecom	13,056	5,666	250	18,972
Total	46,436	20,691	17,040	84,217

High tech saw 84,217 layoffs in the first quarter of 2009, which is about 486 percent higher than in the first quarter of 2008, so no good news there. Total layoffs across all industries according to Challenger reached 578,510 in the first quarter. That puts tech at 14.6 percent of all layoffs for the quarter -- better than the 15.7 percent that January and February showed, but still a significant number given the sector's size compared to the overall economy. The mildly encouraging fact is that the number of job cuts has dropped each month in the quarter. According to the firm, this is the first two-month decrease in job cuts in the last two years.

But tech job cuts aren't mirroring the same job cut rate drop as the bigger picture. Challenger calculated a drop in overall job cuts of 23 percent between January and February and another 19.3 percent from February to March. In high tech, between January and February, the sector saw a slowing of over 55 percent. But between February and March, that drop slowed to about 17.6 percent. That's still a significant change, though it suggests that high tech may have simply front-loaded more job cuts than many other parts of the economy.

There has been some announced job creations in the sector. According to Challenger, tech companies have announced in March that they planned to hire 3,829 positions. That is 20.3 percent of the total announced monthly hiring plans. And given that the sector hiring plans in February were a big fat zero, it's in the direction you'd want to see it moving. But it's still nearly 4.5 positions lost for each one gained.

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