IT And Media Cut 13,000 Jobs In July
It was the biggest one-month decline in more than year, as publishing houses and tech firms implemented cutbacks driven by declining ad revenues, industry consolidation, and offshoring.
The U.S. economy's technology and media sectors shed 13,000 jobs in July in its biggest one-month decline in more than year, according to the federal government, as publishing houses and tech firms implemented cutbacks driven by declining ad revenues, industry consolidation, and offshoring.
Information industry employment, which includes jobs in traditional and online publishing, as well as software publishing, telecom, and data processing, declined a half-percent from 2.996 million to 2.983 million over the course of July, the Bureau of Labor Statistics said.
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The telecommunications industry alone lost 5,000 jobs in the month, the government said. Overall, the information sector has lost 44,000 jobs over the past year.
Several factors are contributing to the downturn.
A slowdown in advertising is hitting both print and Web publishers. Omnimedia, which publishes the online and paper editions of Martha Stewart Living, cut 25 jobs this week, according to the New York Post. Earlier this week, Playboy Enterprises, which publishes Playboy Magazine and Playboy.com, said first-quarter revenue was off 14%.
Tech firms are also feeling the squeeze as the industry consolidates and customers reduce spending. InformationWeek recently reported that 67% of IT professionals said their companies would either cut tech spending in 2008 or, at best, maintain the previous year's levels. The full report can be downloaded here (registration required).
EDS last week denied a published report that it's about to pare 20% of its North American staff, but it's likely there will be some jobs lost as the outsourcer prepares to complete its merger with Hewlett-Packard.
Even IBM, which last month recorded $2.8 billion in second-quarter profits, is cutting back. The company this month said it would reduce some workers' pay by 10% at its semiconductor plant in Essex Junction, Vt. Earlier this year, IBM sent 350 finance and accounting jobs in Tulsa, Okla., to a lower cost center in Buenos Aires, Argentina. Big Blue has also been selectively trimming staff at several other locations in the United States over the past months.
In the hard-hit telecom industry, Nortel last week reported a $113 million quarterly loss and is reducing its payroll by 2,000 positions.
The Bureau of Labor Statistics said that the information industry saw 47 "mass layoff events" in June, but it did not report any for July.