TECH SHEDS 96,017; 18% OF ALL JOB CUTS

CHICAGO, February 16, 2016 – After falling 21 percent in 2015, job cuts announced by employers in the U.S. technology sector increased by the same amount in 2016, according to a new analysis of layoff data by global outplacement firm Challenger, Gray & Christmas, Inc.    

Employers in the technology sector, which encompasses computer, electronic and telecommunications firms, announced 96,017 planned job cuts in 2016.  That was up 21 percent from a 2015 total of 79,315.    

Computer firms announced 66,821 job cuts last year, 7 percent more than the 62,191 announced in 2015. The increase was due primarily to thousands of cuts announced by Dell Technologies in its $63 billion acquisition of EMC.

Telecommunications saw the most significant increase in job cuts.  Downsizing in the industry surged 327 percent to 20,118 last year from 4,708 in 2015. This jump comes amid restructuring at telecom giants, such as Sprint, Frontier Communication, and Broadcom.

Overall, the tech sector was responsible for 18 percent of the 526,915 total job cuts announced in 2016.

“The increase in tech sector job cuts comes amid a time of growth and volatility. Traditionally stalwart companies have transformed to compete with start-ups that seemingly instantly become major players,” said John A. Challenger, chief executive officer of global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.

“While the tech sector remains a strong area of growth, many of the strategies employed to compete ultimately end in some sort of job loss. Dell Technologies, in its acquisition of EMC, is maintaining its huge size to better help clients, while HP’s strategy has been to downsize to remain nimble. Both entities cut thousands of jobs in the process.

“Thousands more are still to come, especially as companies shift focus to cloud-based computing and smartphones. Last year, we saw significant cuts from traditional equipment and hardware manufacturers,” noted Challenger.

Indeed, one of the larger tech-sector cuts in 2016 was the 12,000 Intel layoffs, 11 percent of its workforce, which resulted from the chipmaker’s failure to take advantage of mobile technology. Meanwhile, Cisco Systems saw 5,500 jobs lost, 7 percent of its workforce, in order to compete with cloud computing giants like Amazon.

“It is likely this kind of job cutting will continue in 2017, as new technologies cause tech giants to shift and pivot. The challenge for these companies, as it has always been, will be finding the skilled labor to keep up with the pace of change. The president’s plan to reform access to work visas may significantly impact how tech companies recruit and retain talent,” said Challenger.

In 2015, about 70 percent of the H1-B visas issued went to engineers, coders, and other tech workers from India. According to the Brookings Institute, 27,000 H1-B visa holders work in Silicon Valley.

“If any industry in the United States suddenly lost thousands of skilled laborers, it would have an immediate impact on operations and innovation. If this occurs in the tech sector, where innovation is the lifeblood of the industry, it could not only disrupt normal processes, but also significantly threaten the industry as a whole,” said Challenger.



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2016 TECHNOLOGY JOB CUTS

Q1
Q2
Q3
Q4
Total
Computer
17,002
22,587
20,130
7,102
66,821
Electronics
1,966
2,202
3,096
1,814
9,078
Telecom
5,510
894
6,977
6,737
20,118
TOTAL
24,478
25,683
30,203
15,653
96,017

2015 TECHNOLOGY JOB CUTS

Q1
Q2
Q3
Q4
Total
Computer
6,860
4,758
47,256
3,317
62,191
Electronics
2,906
839
6,435
2,236
12,416
Telecom
1,513
1,014
1,298
883
4,708
TOTAL
11,279
6,611
54,989
6,436
79,315

2014 TECHNOLOGY JOB CUTS

Q1
Q2
Q3
Q4
Total
Computer
9,133
20,869
     19,000
    10,526
59,528
Electronics
3,051
2,305
     11,149
      2,903
19,408
Telecom
11,277
1,767
       1,777
      7,000
21,821
TOTAL
23,461
24,941
     31,926
    20,429
100,757



ANNUAL TECH-SECTOR JOB CUTS

2000 – 2015



Total
% of All Cuts

Total
% of All Cuts
2000
          103,266
17%

2008
      155,570
13%
2001
          695,581
36%

2009
      174,629
14%
2002
          468,161
32%

2010
        46,825
9%
2003
          228,325
19%

2011
        37,038
6%
2004
          176,113
17%

2012
        83,213
16%
2005
          174,744
16%

2013
        56,918
11%
2006
      131,181
16%

2014
      100,757
21%
2007
      107,295
14%

2015
79,315
13%

Source: Challenger, Gray & Christmas, Inc.




CONTACTS
Colleen Madden, Director of Public Relations
Office: 312-422-5074
Mobile: 314-807-1568
colleenmadden@challengergray.com
 James K. Pedderson, Public Relations Consultant
Office: 312-422-5078
Mobile: 847-567-1463
jamespedderson@challengergray.com