Dot-com layoffs eased at end of 2001

The number of layoffs at dot-com companies continued to taper off in December, ending a grim year for Internet-based companies, which saw a total of 100,925 jobs eliminated, according to outsourcing firm Challenger Gray & Christmas Inc.

“For now, things appear to be somewhat more stable for the dot-coms that survived the major shakeout that lasted about nine months, from November of [2000] through July 2001. But this is still a relatively young industry that is still going through growing pains and is therefore very volatile,” said John A. Challenger, CEO of Challenger, Gray & Christmas in Chicago.

Dot-com companies that provide technology services led the way with 1,300 cuts in December, followed by consumer services with 471 and financial services with 332, the firm reported in its monthly analysis of dot-com layoffs. Technology dot-coms had the greatest number of layoffs for the entire year, with 36,519.

The slowdown in cuts at the end of the year is partially due to the lack of jobs left among companies that provide goods and services exclusively online. In 2000, the number of cuts was 41,515 – less than half the number of layoffs in 2001.

The one bright spot for online commerce was the travel industry, which had a successful holiday season, judging by the number of tickets sold online.

Chicago-based Orbitz LLC, which launched in June, reported sales of 30,000 to 60,000 tickets per day in November, the Challenger report said. Overall, the online travel business is expected to post industrywide sales of US$14.2 billion for 2001, according to the firm.

Online retail sales also increased 31 per cent this year, Challenger said.