Challenger: Dot-com job cuts nearly triple in May

Job cuts posted by dot-coms rose to 2,078 this month, up from the 824 cuts announced in April, according to the monthly survey released today by Chicago-based outplacement firm Challenger, Gray and Christmas Inc.

Challenger said the May numbers were the highest since December, when 2,403 dot-com job cuts were recorded. The May figure was 152 percent higher then April’s numbers, which were the second lowest in two years. Dot-com job cuts were at their lowest in February, when 670 cuts were announced.

Technology firms topped the list of Internet companies cutting jobs, posting 1,517 job cuts, followed by online consumer services firms with 390, Challenger said.

Despite the increase in dot-com jobs cuts in May, Challenger said the numbers remain well below those announced a year ago. This month’s figure was 86 percent lower than the 13,419 job cuts announced in May 2001, the firm said.

Challenger said only 6,923 dot-com job cuts have been announced since the beginning of the year, down 89 percent from the 64,983 cuts posted in the first five months of 2001.

Since Challenger began tracking dot-com job cuts in December 1999, 149,363 cuts have been announced.

John Challenger, CEO of Challenger, Gray and Christmas, said although dot-com firms are not cutting jobs at the pace they were a year ago, they are still letting workers go at a steady rate.

“We will likely continue to see consistent job cutting from this industry,” Challenger said. “New Internet firms are still being started all the time, so these will be a source for both job creation as well as job loss in the future.”