CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

Study: Dot-com job cuts continue to rise

Layoffs for the period from Sept. 25 through Oct. 20 rose to 5,677, a record for a single month and the fifth consecutive month of increases, according to a new study.

    Dot-com job cuts are coming at a record pace, and the increase is likely to continue in the coming months, according to a new labor study.

    The study, released Monday by outplacement firm Challenger Gray & Christmas, found that job cuts for the period from Sept. 25 through Oct. 20 rose to 5,677, a record for a single month and the fifth consecutive month of increases.

    The October figure marks an increase of 18 percent from the preceding month, when struggling dot-coms accounted for 4,805 layoffs. Since December 1999, the total number of job cuts is 22,267, according to Challenger Gray.

    Online pharmacy, Net consulting firm Gen3 Partners, interactive entertainment site and online MP3 storage company are among a growing list of Internet companies that have trimmed their employee bases in the last month alone. The latest,, Monday said that it is letting go 240 employees.

    A slew of Net companies also have been reporting bankruptcy or business failure, as the overall sector continues to suffer following a drastic technology market correction in April that left many high-flyers wounded and investors wary.

    Despite the recent layoffs, demand for high-tech workers continues to be strong. The need for software engineers, optical networking specialists and programmers is building, while the call for less-technical workers--from content editors to investor relations specialists--appears to be cooling slightly, according to industry observers.

    Challenger Gray noted that the upcoming holiday season is crucial to the survival of many struggling dot-coms, as investors and employees continue to place their attention on companies' ability to turn profits. Many e-tailers will need to generate a critical mass of paying customers and find a way to prove that consumers can find the products they need easily at a reasonable price and get problem-free delivery.

    The Chicago-based firm offered a somewhat bleak outlook, projecting that the worst of the shakeout, especially in the online shopping sector, may well arrive with the holiday season.

    Challenger said 44 of 274 dot-coms, or 16 percent, have failed since last December. Many of these new Internet companies will disappear completely, while others will be acquired by brick-and-mortar companies building an e-commerce arm, the study said.

    Dot-coms that focus on consulting, financial and information services have suffered the most cuts since December, accounting for 36 percent, or 8,113 job cuts. The retail sector was second with 5,450 cuts. About 2,190 job cuts came in the health and fitness sectors.