Dot-Com Job Cuts On The Decline

Dot-com job cuts have been steadily declining in recent months, and that trend hit a new low in February. Last month's job-cut tally was the smallest in nearly two years, at 670, according to Chicago-based outplacement firm Challenger, Gray & Christmas. That's a significant improvement over January's total of 1,802, and a fraction of the February 2001 total of 11,649.

Challenger's data for last month showed some encouraging signs for the tech sector. For the three months ending in January, the tech sector held the dubious honor of business category with the most dot-com job cuts--it accounted for more than half of all job cuts in November, for example. But that changed in February, with financial services posting nearly three times as many job cuts as the tech sector. The financial sector was the leading business category for job losses at 300, followed by consumer services (159) and tech (110).

But the drop in job cuts shouldn't be viewed as patently good news, says John Challenger, president of the outplacement firm. Companies have already trimmed the fat and then some, so job losses are minimal because the dot-coms have already decimated their staffs--and Challenger doesn't see any signs of an impending surge in dot-com hiring. "In some ways, dot-com is dead," he says. The good news is that most of the effects of the Internet bubble have been rooted out, Challenger says. "Now, E-commerce is not so much about VC-lead startups. It's more about established companies automating systems and integrating the Web's potential to reach customers and suppliers."