Dot-Coms And Telecoms Suffer in July
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Although July showed the lowest number of job cuts in 14 months in the U.S., the dot-com sector suffered yet another blow, with layoff figures jumping 156% from the month before.
"It's like the industry is on a roller coaster," says John Challenger, CEO of Challenger, Gray & Christmas, a Chicago-based outplacement firm. "We're getting these waves of layoffs. It's one more indication of the volatility that the sector has experienced from the beginning."
Challenger says he has seen no indication of what is in store for August.
Dot-coms laid off about 1,750 employees last month, according to Challenger, Gray & Christmas. That's up from 684 in June. This marked the third time that the monthly job-cut figure increased significantly following a month with low layoff figures. March, May and July showed an average increase of 146% over their previous months.
These numbers come alongside announcements that July was a good month for workers in most other industries.
Even though 80,966 American workers were laid off last month, that's 15% lower than the month before when 94,766 workers were let go. And it's 61% lower than July of 2001 when 205,975 people were laid off.
So far this year, the job-cut total is 816,493, 17% lower than the 983,337 jobs that had been lost last year at this time.
Despite the slow growth in the job market, the telecommunications industry continues to be hammered. For the fourth consecutive month and the tenth time in 13 months, telecom was the top job-cutting industry with 20,196 layoffs. It represents one of the few sectors where layoffs continue to increase. So far this year, telecom has announced 186,036 job cuts -- 6% more than at this time last year.
"The high-tech sector has been hit very hard through all of this," says Challenger. "Consumer confidence dropped significantly in the last month. Dot-coms, telecoms are being hit by a more cautious consumer."
Since Challenger, Gray & Christmas began tracking dot-com layoff announcements in December, 1999, the firm has counted 151,797 job cuts. Fifty-five percent of those cuts were announced in the first seven months of 2001, the period that sounded the bursting of the dot-com bubble.