Report: 12-Month Tech Layoffs Sink 21 Percent to End 2011

Chicago — Jan. 23

Despite a surge in tech-sector downsizing in the second half of 2011, the number of job cuts announced by these firms last year plunged to the lowest level ever recorded in tracking going back to 1997, according to the latest report on technology sector job cuts released on Monday by global outplacement firm Challenger, Gray & Christmas Inc.

Technology firms, including those in the computer, electronics and telecommunications industries, announced a total of 37,038 planned job cuts in 2011, down 21 percent from 46,825 in 2010. The year-end total was down 79 percent from the recent peak of 174,629 recorded in 2009, when the recession was at its worst.

The decline in technology job cuts occurred as overall job cuts increased. The number of job cuts announced across all industries rose 14 percent from 529,973 in 2010 to 606,082 in 2011. The technology sector accounted for 6.1 percent of the 2011 total. That is the lowest percentage of tech-sector cuts on record, falling from last year’s record low of 8.8 percent.

Technology job cuts did surge in the second half of 2011, raising concerns about whether the upward trend will continue into 2012. From January through June, tech-sector job cuts totaled 14,308. Job cuts jumped 59 percent to 22,730 between July and December. That was up 99 percent from the 11,450 tech-sector job cuts announced during the same period in 2010.

Most of the second-half surge in the technology sector came from firms in the computer industry. After announcing just 3,178 job cuts in the first half of 2011, computer firms announced planned layoffs totaling 11,499 in the second half of the year, a 262 percent increase.

According to the latest data from the U.S. Bureau of Labor Statistics, payrolls at of computer and electronics manufacturing firms saw a net gain of 13,100 jobs in 2011, bringing total employment to 1,124,000.

Meanwhile, employment at companies providing computer systems design and related services increased by 60,200 to 1,525,100.

Not every area in the technology sector saw employment increase.

For example, payrolls at firms categorized by the Bureau Labor Statistics as data processing, hosting and related services shrank by 2,100 to 238,900.

Source: Challenger, Gray & Christmas Inc.