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James K. Pedderson, Director of Public Relations Office: 312-422-5078 Mobile: 847-567-1463 jamespedderson@challengergray.com Colleen Madden, Media Relations Manager Office: 312-422-5074 colleenmadden@challengergray.com

CHICAGO, July 20, 2011 In past years, the 6,500 job cuts announced this week by Cisco Systems probably would not have stood out, particularly in a sector that at one time commonly saw job-cut events numbering in the tens of thousands. This year, however, the Cisco announcement stands out as the largest job cut of the year in a sector that is experiencing record low downsizing. Technology firms announced just 14,308 job cuts in the first half of 2011, a 60 percent drop from the 35,375 cuts announced during the same period a year ago, according to a special report on technology-sector job cuts released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc. While first-half job cuts announced by telecommunications, electronics and computer firms were up slightly from 11,450 job cuts announced in the final six months of 2010, the increase probably does not signal a resurgence in tech-sector downsizing.



The Cisco cuts notwithstanding, the overall health of the technology sector remains very strong. In fact, it is one of the best performing industries in the economy at the moment. It is highly unlikely that planned layoffs in the second half of the year will be heavy enough for the year-end total to surpass last years record low 46,825 job cuts, said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. The 14,308 tech-sector job cuts announced so far this year represent just 5.8 percent of the 245,806 job cuts announced across all industries. In contrast to the 60-percent decline in tech-sector job cuts, the overall job-cut total for the first half of 2011 is down only 17 percent from last years sixmonth total. The biggest decline in tech-sector job cuts was experienced by computer firms, which saw the number of planned layoffs plunge 81 percent, from 16,964 in the first half of 2010 to 3,178 this year. The only other industry to see a bigger drop in layoffs this year is pharmaceutical, where job cuts declined 86 percent from 34,987 to 4,771. Job cuts announced by telecommunications firms dropped 57 percent from 16,005 in 2010 to 6,813 this year. Firms in the electronics industry were the only segment of the tech sector to see an increase in job cuts. Layoffs among these employers increased 79 percent from 2,406 a year ago to a 2011 six-month total of 4,317, which is still very low by historical standards. Prior to the Cisco workforce reductions, which will be counted in Challengers third-quarter tally of tech-sector job cuts, the largest reported layoff this year came from telecommunications firm Qwest Communications, which announced 1,800 planned job cuts in March.



As many sectors outside of government continue to see relatively low downsizing activity, the tech sector is one of the few areas actually adding workers. Through June, companies in the sector announced plans to add nearly 26,000 workers, which represents just a small portion of actual hiring, since most employers do not formally announcing hiring plans, noted Challenger. According to payroll figures from the Bureau of Labor Statistics, employment within computer systems design and related services has grown by 42,000 since the beginning of 2011. Computer and electronics manufacturers have added more than 12,000 workers to their payrolls. Meanwhile, according to a survey by IT job site Dice.com, the hiring should continue into the second half of 2011. The sites June survey of nearly 900 hiring managers and recruiters, found that 65 percent anticipate hiring more technology professionals in the second half of 2011 than the preceding six months. An article appearing last June in information technology industry publication, InfoWorld, identified some of the IT jobs with the best growth potential. Making the list were business architect, data scientist, social media architect, mobile technology expert, enterprise mobile developer and cloud architect.




Computer Electronics Telecom TOTAL Q1 1,887 2,202 4,552 8,641 Q2 1,291 2,115 2,261 5,667 Q3 Q4 Total 3,178 4,317 6,813 14,308


Computer Electronics Telecom TOTAL Q1 5,823 1,720 14,795 22,338 Q2 11,141 686 1,210 13,037 Q3 1,219 1,719 2,212 5,150 Q4 3,867 947 1,486 6,300 Total 22,050 5,072 19,703 46,825


Q1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 19,478 161,520 110,247 61,032 29,513 59,537 39,379 32,021 17,345 84,217 22,338 Q2 13,940 151,869 132,953 36,967 34,213 39,720 29,226 32,314 33,644 33,891 13,037 Q3 26,673 213,420 91,450 47,998 54,701 41,439 50,957 26,242 38,269 24,808 5,150

Q4 43,175 168,772 133,511 82,328 57,686 34,048 11,619 16,718 66,312 31,713 6,300

Total 103,266 695,581 468,161 228,325 176,113 174,744 131,181 107,295 155,570 174,629 46,825

% of All Cuts 16.8% 36.0% 32.0% 18.5% 17.0% 16.3% 16.0% 14.0% 12.7% 13.6% 8.8%

Source: Challenger, Gray & Christmas, Inc.

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