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June 3, 2007
SAN JOSE - It was a lousy week to be a tech worker, and some say it may be getting worse.
High-tech companies Dell Inc., IBM Corp. and Motorola Inc. made or announced more than 14,000 job cuts in a 24-hour period beginning Wednesday.
That was more tech job cuts than were announced in the entire fourth quarter of 2006, and nearly half the number during this year's first quarter.
It's a sign, some say, that even more cutbacks may be coming.
"Cracks are beginning to show," said John Challenger, whose Chicago outplacement firm tracks job cut announcements. "The job market has kind of hit its peak, and now it's starting to slow."
"Job security? It's almost nonexistent," said Lee Conrad, national coordinator for Alliance@IBM, an offshoot of the Communication Workers of America union that tries to organize IBM workers.
While IBM hasn't announced plans for new layoffs, Conrad's group predicts that the company could cut 8,000 to 12,000 employees this year as it proceeds with its LEAN cost-cutting program, which includes automation of some jobs and overseas outsourcing of others.
Visits to Alliance@IBM's Web site, where the company's workers worldwide can get information and swap stories about what's happening with their jobs, has soared from an average 40,000 a month to 101,000 in May.
IBM workers from Atlanta; Austin, Texas; Raleigh, N.C. and other places where the company has major facilities have reported layoffs in their offices.
"It's a matter of time," one poster wrote. "Guess it didn't affect us this time, but there's always next time."
Amid overall economic slowdown it could just be the tech sector's turn, Challenger said.
Challenger added that the increase in technology job cuts "should be sending up warning flags about the state of the economy."
The Commerce Department on Thursday reported that the nation's gross domestic product increased by just 0.6 percent in the first quarter, much weaker than expected and the slowest rate in more than four years.
The layoffs announced this week - 8,800 at Dell, 4,000 at Motorola and 1,570 at IBM - are connected to specific problems at the companies.
Dell is dealing with increased competition from rival Hewlett-Packard Co., a management shake-up and a Securities and Exchange Commission investigation, among other issues.
Motorola is struggling with a slowdown in sales of its popular Razr cell phones and other products.
IBM has its own issues too, exemplified by its internal cost-cutting program.
Bill Archey, president of the technology industry trade group AeA, said it's a leap to suggest the cutbacks at Dell, Motorola and IBM indicate more cutbacks to come.
Last year, Archey pointed out, the nation's high-tech industry grew at the fastest rate since the 1990s dot-com boom, adding nearly 150,000 jobs. Tech employment in 2006 was the highest since 2002.
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