Tech Industry In Flux More Job Cuts at IBM Others Expected

Tech Industry 'In Flux,' More Job Cuts at IBM, Others Expected

3 minute read
Dom Nicastro avatar

Technology is one bi-polar industry.

On one hand, it's one of the strongest sectors, poised for creativity and growth.

One the other, it's the leading industry for job cuts -- and more will come this year.

Planned workforce reductions in the technology sector in 2014 rose to the largest year-end total since 2009, according to global outplacement firm Challenger, Gray & Christmas, Inc.

How many jobs lost? 100,757 tech job cuts in 2014, up 77 percent from 56,918 in 2013.  

Better Than the Rest

For every five jobs cut in 2014, one was in the tech sector, which was responsible for 21 percent of the 483,171 total job cuts announced in 2014. It was the first time tech-sector job cuts exceeded 100,000 since 2009, when they reached 174,629, according to officials at Challenger, Gray & Christmas, Inc.

“Oddly, the technology sector was among the stronger segments of the economy in 2014 and is likely to be a source for continued growth and job creation in 2015," John A. Challenger, CEO of Challenger, Gray & Christmas, said in a statement.

Challenger cited several large scale layoff announcements from tech giants -- including 18,000 from Microsoft and 16,000 from Hewlett-Packard -- companies that have now shed more than 50,000 workers since 2013.

He also cited announcements from other old-guard tech firms -- such as Cisco Systems, Intel and Symantec.

It's not indicative of a sector in decline, he said, "but of one that is in flux."

"Several of the firms announcing job cuts in 2014 mentioned the need to be more nimble and streamlined to remain competitive," he said.

Whoa, IBM: 26 Percent?

Is it over? Not quite, according to some industry reports. According to Forbes contributor Robert X. Cringley, IBM's next. Big Blue this week will cut 26 percent of its workforce, he predicted. IBM announced last week declining revenues for the 11th straight quarter. 

TechCrunch reports the job cuts will be significantly lower — somewhere in the neighborhood of 11,000 to 12,000.

Learning Opportunities

But even one layoff is one too many for the person who receives the pink slip. And odds are many more than one tech industry workers will find themselves out of jobs this year, here and abroad.

"The USA will be hit hard, but so will other locations," Cringley wrote Jan. 22. "IBM’s contractors can expect regular furloughs in 2015. One in four IBMers reading this column will probably start looking for a new job next week. Those employees will all be gone by the end of February."


Who was hit hardest in tech in 2014? The computer industry, where employers announced plans to cut payrolls by 59,523, a 69 percent increase from the 35,136 job cuts by these firms in 2013.

In the electronics industry, annual job cuts surged 120 percent from 8,830 in 2013 to 19,408 last year. The 2014 total was the largest for the electronics industry since 65,300 layoffs were announced by these firms in 2009.

Job cuts in the telecommunications industry rose 68 percent to 21,821. The year before, annual job cuts in the industry shrank to 12,952, the lowest 12-month total on record, according to Challenger, Gray & Christmas, Inc.

“Technology is sector where trends shift quickly and companies have to be able to pivot in response without enduring several quarters of earnings losses," CEO Challenger said. "It is common to see simultaneous job destruction and creation, as employers shed workers in one area, while building up another. So, the heavy downsizing that occurred in this sector last year should not be cause for alarm."

Creative Commons Creative Commons Attribution-Noncommercial 2.0 Generic License Title image by gothick_matt