Planned job losses rise, hiring slowdown is next

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Spending and hiring in the technology sector grew this year, but a third-quarter spike in tech-sector job cuts might indicate that a slowdown is under way.

Planned job cuts announced by technology firms surged 74 percent during the third quarter to 50,957, up from 29,226 during the previous quarter. That is the highest quarterly figure since the first quarter of 2005, when cuts totaled 59,537, according to a report by global outplacement consultancy Challenger, Gray & Christmas Inc.

Third-quarter job cuts by employers in the telecommunications, electronics, computer and e-commerce industries were 23 percent higher than the 41,439 cuts announced during the same quarter a year ago.

Because of the relatively light job-cut activity in the tech sector during the first two quarters of 2006, including the lowest quarterly total since 2000, the 119,562 job cuts announced for the industry so far this year are 15 percent below the three-quarter total of 140,696 in 2005.

The majority of third-quarter job cuts occurred in the computer sector, reaching 30,511 during the third quarter, surpassing the 30,342 cuts announced in the first two quarters of the year.

Mergers have been a leading cause of job cuts this year, accounting for 29 percent of all tech-sector job losses through September. However, third-quarter job cuts were dominated by cost-cutting and restructuring, which together accounted for 33,373 or 65 percent of the losses during the third quarter.

“The economy seems relatively stable now but corporate leaders have been less than optimistic about the outlook for 2007,” said John A. Challenger, CEO of Challenger, Gray & Christmas. “For technology companies, this translates into lower business-to-business and consumer sales.”

A survey of chief information officers by CIO Magazine confirms the more pessimistic outlook. The consensus among the CIOs was that IT spending budgets would increase just 6.5 percent during the next 12 months. That number is down from a 9.3 percent increase forecast last year.

With slower growth expected during the coming months, not only have employers cut payrolls, but a survey by the National Association of Computer Consultant Businesses found that after a year of growth in IT employment, hiring was flat in September.

The decline in hiring was echoed by Challenger data that shows technology companies announced plans to hire just 5,764 new workers during the third quarter, down from 14,090 during the second quarter.

CAIP seeks volunteers

A nonprofit group that focuses on Internet professionals is seeking volunteers to lead the organization, as it faces the possibility of disbanding.

The Colorado Association of Internet Professionals has a six-year history in Colorado Springs, said vice-president Dan VanWikik. The group has sponsored job fairs, Web awards and public forums to grow local business and the Web development community.

The organization has planned several more events, but says its future is uncertain without more volunteers to fill critical board positions, including president, vice president, secretary, programs director, membership director and at-large representatives.

In addition, the group is seeking help to organize special vents.

Volunteers are compensated with free membership and access to all events, and will only spend a few hours each month, helping to organize the events and lead CAIP.

For more information, contact Dan VanWikik at or David Ashley at 638-9925 or

X-ray cams win contract

Salvador Imaging has received a six-year contract to design and manufacture cameras for the veterinary x-ray imaging market. The first year of the contract is valued at $1.9 million.

Salvador’s new camera is part of the Merlin D-RadTM digital radiography suite, which eliminates the need for film in veterinary x-ray systems. In addition to eliminating the time and inconvenience associated with chemical film processing, the camera allows veterinarians to capture sharper images with lower radiation doses.

Salvador Imaging designs and manufactures high-performance digital imaging products for medical, industrial and military applications.

Call center technology

Cost, revenue, profitability and customer satisfaction can all increase if call centers improve their technology, according to a study by the Aberdeen Group.

The group recommends Voice over Internet Protocol (VoIP), speech recognition, data integration and speech-enabled call mining as technologies call centers should use to improve their profitability.

“The recommended improvement activities apply across industries, for companies large and small, with high- or low-call volumes and with a cost benefit that is available to all contact centers,” the report said.

Cross-channel sales analysis is another solution for telecom and high-technology companies — with 64 percent having planned to purchase the technologies to improve call center performance.

The report also reveals how companies are taking advantage of emerging technology to make the most of their call centers. The group recommends companies use technology and network infrastructure to add to their call center services.

The full report can be downloaded at free of charge, but registration is required.

Amy Gillentine covers technology for the Colorado Springs Business Journal.