The technology sector in the U.S. has always been in headlines due to various issues. Most recently the sector was in news due to the projected decline in the number of deals because of expected drop in companies' IT spending, which is going to decline by 3.1 percent in 2009 (as per Forrester's recent study). The sector is again set to make more headlines with the number of layoffs announced in the recent past.

Companies operating in the U.S. tech sector have announced 84,217 jobs cut in the first quarter of 2009, according to Challenger, Gray & Christmas, a global outplacement company. Of which 18,972 employees were laid off in the telecom tech sector (12,395 more than the number of employees laid off in the same area in Q1 '08),  33,665 in computer (26,740 more layoffs than in the same period last year), and 33,665 in electronics (27,737 more jobs cut than Q1 '08).

This is the largest quarterly jobs cut since Q4 '02 when the industry had posted 133,511 layoffs and five times higher than Q1 '08 when it had registered 17,345 jobs cut.

“In addition to job cuts, a growing number of tech firms announced across-the-board salary cuts to help reduce costs. Just some of the notable technology firms announcing pay cuts in the first quarter included AMD, Seagate, Hewlett-Packard and Motorola. Some, including Yahoo, instituted pay freezes and others are suspending contributions to 401(k) plans,” said John A. Challenger, CEO, Challenger, Gray & Christmas.

As of now, only 1,360 merger-related jobs cut have been announced by tech firms, as per the statement released by the outplacement firm. In 2008, technology sector mergers resulted in 31,313 job cuts.
 
“Technology sector job cuts are expected to remain heavy in the coming months. We may start to see an increase in merger activity among tech firms, as they attempt to gain an economic and competitive foothold in this downturn. Most recently, IBM and Sun Microsystems have initiated talks over a possible corporate marriage. In most of these mergers, the first step taken to offset the cost of the merger is to eliminate redundant positions. For large entities like IBM and Sun, this could mean thousands of workers,” added Challenger.

Annual Tech Sector Jobs Cut Announcements