Tech job cuts both ways

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Job cuts in the technology sector declined significantly during the second quarter, possibly signaling a turnaround for an industry that has been impacted heavily by the recession. 

Planned layoffs announced by employers in the computer, electronics and telecommunications industries totaled 33,891 during the quarter ending June 30, according to global outplacement consultancy Challenger, Gray & Christmas Inc.  That was down 60 percent from the previous quarter when tech-sector job cuts reached 84,217, the highest level since the fourth quarter of 2002.

Despite the second-quarter decline, tech-sector job cuts for the first half of the year reached 118,108, which is the largest six-month total in seven years.  It was more than double the 50,989 cuts announced between January and June in 2008.

The computer industry led tech-sector job cuts during the second quarter with 19,881 announced layoffs, 37 percent fewer than the 31,580 cuts during the first quarter.  The biggest declines in job cuts were enjoyed by employers in the electronics and telecom industries, in which planned layoffs dropped 64 percent and 90 percent, respectively.

Planned job cuts announced by employers in the electronics industry fell from 33,665 during the first quarter to 12,134.  Telecom firms announced only 1,876 job cuts in the second quarter, down from 18,972 in the first three months of 2009.

Locally, however, the tech industry has not been hit as hard as the national sector, said Dr. Terrance Boult, El Pomar endowed chair of Innovation and Security at the University of Colorado at Colorado Springs, and owner of Securics Inc.

Some local companies, including Securics, have remained stable because of Department of Defense and National Science Foundation contracts.

And during the past six months, UCCS and Securics have helped their small businesses partners obtain $3 million in research and development grants.

Nationally, as the country pulls out of the recession and consumers buy more high-tech items, it will help the tech industry recover, Boult said.

And there will be growth opportunities in the national market as more consumers switch from  land lines to cellular communications.

“Telecom and electronics firms appear to be benefiting from a recession-defying wireless market,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “Between the companies trying to outdo the iPhone and those helping more and more Americans disconnect their land lines for cellular-only phone communications, there are a lot of growth opportunities. Computer firms may lag a little as companies wait for more proof of recovery before they begin to reignite investments in new technologies, but the end of the recession should bring a flood of new spending in this area.  Some firms may even begin to invest early, in the hopes that productivity-enhancing technology can temper the need to recruit new workers.”