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Report: Dot-Com Job Losses Shrink in June

By Keith Regan E-Commerce Times ECT News Network
Jul 2, 2002 9:31 AM PT

Companies took a break from laying off workers from Internet-related jobs in June, with just 684 layoffs announced, according to a report from international outplacement firm Challenger, Gray & Christmas.

Report: Dot-Com Job Losses Shrink in June

By comparison, dot-coms cut more than 2,000 jobs in May. But the respite might be just a temporary lull in the action, as corporate failures inside and outside the tech world almost certainly guarantee more layoffs, company CEO John A. Challenger told the E-Commerce Times.

"The dot-com sector is clearly still experiencing a lot of volatility," Challenger said. "One month cuts are up, the next month they are down."

The June figure was a full 93 percent lower than it was year ago, when 9,216 jobs dropped out of the Internet economy.

Positive Trend

This year, layoffs were down 11 percent in the second quarter, to 3,586, compared to 4,021 for the January-to-March 2002 timeframe. And in the second quarter of 2001, Internet job cuts peaked at 40,189 layoffs.

Challenger said the data seems to indicate two trends: The large-scale downsizing of early 2001 is apparently a thing of the past, and Internet companies are now able to respond quickly to market changes.

"These firms seem to be very adept at adjusting their workforce levels quickly, hiring and firing as business ebbs and flows," he said. "It is likely that job cuts will come in waves like this for some time."

Dot-Com Cuts

About 150,000 workers have been let go from dot-com firms since Challenger began tracking the trend in 1999.

But the total let go since January of this year, 7,607, is below the average monthly layoff tally, when an average of 8,410 people lost their jobs every month.

Once again, dot-com technology firms led the layoff list, with 390 jobs cut. Consumer services firms cut 229 while media companies shed 65 workers. Challenger said no online retail jobs were reported lost in June.

Economic Blues

The dot-com report arrives against a stark backdrop. Challenger said overall job cuts in the U.S. rose during June, due largely to fallout within the telecommunications industry from the accounting mess at WorldCom.

Announced or planned job cuts across the economy reached 94,766 in June, up 12 percent over May levels, with one-third of all layoffs coming from telecom companies. WorldCom itself said it would cut 15,000 positions in the coming months.

Challenger said the fallout from the WorldCom scandal and others like it will likely be lost jobs for thousands of workers.

"With each restatement of earnings, it seems that more job cuts are announced," he said.


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