High-Tech Job Cuts Drop In 2002

Although many technology companies announced layoffs in 2002, the number of high-tech job cuts fell by 33% compared with 2001, according to a recent report from international outplacement firm, Challenger, Gray & Christmas Inc.

The high-tech sector, which consists of telecommunications, computer, electronics, and E-commerce companies, totaled 468,161 job cuts in 2002, compared with 695,581 in 2001. Not surprisingly, telecom was the hardest-hit segment, accounting for 46% of the sector's job cuts, with 268,857 layoffs. The high-tech sector will continue to experience job reductions in 2003, CEO John Challenger says, because of a lack of new and steady technology spending planned by businesses for this year.

Although IT budgets have decreased to 8.6% of overall revenue this year from 9.3% in 2002, three in 10 companies plan to spend more on IT, networking, or outsourced services in 2003, according to InformationWeek Research's Priorities 1Q 2003 study of 300 business-technology executives.