Job cuts by Internet firms continue to fall

For the second time in three months, dot-com job cuts fell below 1,000, according to a monthly report from Chicago-based outplacement firm Challenger, Gray and Christmas Inc.

In April, Internet companies cut 824 jobs, down 47 per cent from the 1,549 cuts announced in March, Challenger said. The April dot-com cuts bring the total cuts in that area so far this year to 4,845. For the first four months of 2001, the number of dot-com job cuts totaled 51,564.

In addition, Challenger said it was the fifth time in six months that the total number of dot-com job cuts was lower than the previous month. The only time dot-com job cuts increased during the past six months was in March, when the number rose to 1,549 from the 670 cuts announced in February.

The 824 cuts announced in April were 95 per cent lower than the 17,554 cuts recorded in April 2001.

Since Challenger started tracking dot-com job cuts in December 1999, a total of 147,285 cuts have been announced.

Challenger said Internet firms offering consumer services posted the highest number of job cuts in April — 393 — followed by technology firms, which eliminated 300 jobs.

“There have been some promising signs lately that things might turn around for certain dot-coms,”said Challenger CEO John Challenger. “Travel sites are doing exceptionally well, considering the drop-off in travel and tourism since September 11.”

Challenger said that although the dot-com sector seems to be stabilizing, it may not last.

“Some Web sites are considering charging fees for services which are currently being offered free. This may not sit well with regular visitors who have become accustomed to the free services,” he said. “Just like any other business, if you lose the customers, the business is going to have a difficult time staying afloat.”