Tech Sector Layoffs Surge to Three-Year High

I am starting to think the next jobs report is going to be downright miserable. New orders have plunged and mass layoffs are on the rise.

Please consider Tech sector layoffs surge to three-year high

During the first half of the year, 51,529 planned job cuts were announced across the tech sector, representing a 260 percent increase over the 14,308 layoffs planned during the first half of 2011. Things are so bad so far this year that the figure is 39 percent higher than all the job cuts recorded in the tech sector last year.

Hewlett-Packard proved to be the major force behind this year's uptick in planned layoffs, after the company announced in May that it would cut 30,000 jobs. Those layoffs will be completed by the end of fiscal 2014, and shave off 8 percent of HP's entire workforce.

It was also a tough beginning of the year for Sony and Nokia, both of which said they would lay off 10,000 employees. Panasonic and Olympus are also eyeing layoffs to make their operations more nimble.

The issue in the tech sector, according to the outplacement firm, is that success is increasingly finding its way to a short list of companies. All others are hoping they can stay afloat or revive their operations around new ideas. And all of that could lead to more cuts across the industry in the coming months.

"We may see more job cuts from the computer sector in the months ahead," John A. Challenger, CEO of Challenger, Gray & Christmas, said today in a statement. "While consumers and businesses are spending more on technology, the spending appears to favor a handful of companies. Those that are struggling to keep up with the rapidly changing trends and consumer tastes are shuffling workers to new projects or laying them off altogether."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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