Tech Job Loss Staunched in February

Channel News

Technology companies laid off 33,000 workers in February, two-thirds less than the number displaced in January. The slowing pace of layoffs may signal optimisms for an upward turn in economic activity.

February technology layoffs dropped more than 70 percent from January record pace, with more than 33,000 technology jobs displaced.

Panasonic announced a cut of 15,000 employees, representing 5 percent of their total workforce. “Business conditions have worsened particularly since last October,” Panasonic said in a statement, “due mainly to the rapid appreciation of the yen, sluggish consumer spending worldwide and ever-intensified price competition.”

Panasonic announced the proposed closing of 13 manufacturing sites in Japan and 14 others by the end of March 2010. The reduction of workforce is expected to be completed at the same time with 50 percent of the job reductions taking place in Japan.

Another Japanese manufacturer, Pioneer, announced their departure from the flat television market and a slashing of 27 percent of their workforce, roughly 10,000.

Pioneer launched the world’s first plasma TV in 1997 and built up a valuable niche among high-end models.  “It is extremely painful to give up a business we have built up as a pioneer in the industry,” President Susumu Kotani told a news conference.   

Pioneer announced the reduction of 6,000 regular employees and 4,000 temporary and contract staff. Those cuts will come on top of the 5,900 jobs it announced last March and December. 

The slowing pace of layoffs is a reflection of how many companies are pausing for signs of future recovery in the economy. In January, major technology vendors shed nearly 125,000 jobs from their rolls. Overall, the US economy gave up nearly 700,000 jobs in January, the highest money job loss in 27 years.

While the news continues to be grim for manufacturers, solution providers are offering an alternative and increasing their workforces.  In a recent Channel Insider survey, 40 percent of solution providers are either in the process of hiring new employees or plan to add to their workforce in the second half of this year.

Frank Ballatore, CEO of New England Computer Group, has a caution for solution providers who are cutting staff right now.  “This is temporary.  We have seen cycles like this before, but if you have built your business around solutions and services this is a great time to grow your business.”

An astounding 67 percent of displaced sales and technical manufacturing employees responded that they are having success with both full time and contract employment at solution providers.

“It has been a great change,” wrote one respondent. “I work each day on a technology I know inside and out and can work directly in growing a company.  This is something I could not do with the big guys.”

Other respondents cited better working environments, opportunity to for growth and working closer to home as the key reasons for joining a solution provider.

Since the economic crisis began in September, the technology industry has shed nearly 239,000 jobs. Following is a list of the latest technology layoffs as tracked by Channel Insider.

  Company Layoffs
February Agilent Technologies 600
Month Total AMCC 100
             33,868 Cisco 2,000
  Electronic Arts 1,100
  Marvell Semiconductor 46
  Micron Technology 2,000
  NetApp 480
  Nokia 625
  Panasonic 15,000
  Pentair Electronic Packaging 174
  Pioneer 10,000
  Razorfish 70
  STEC Inc 35
  THQ 600
  Western Digital 22
  Xyratex International, Inc. 311
  Yahoo 705
January AMD 1,100
Month Total AOL 700
           124,320 Attachmate 120
  Autodesk 750
  BlueArc 21
  Bose 1,000
  Circuit City 34,000
  Citrix 460
  Coremetrics 29
  Dell 1,900
  Electoronic Arts 600