Dot-Com Job Cuts Rise In March - British study

The number of dot-com job cuts jumped up in March after declining for four straight months, according to the outplacement firm Challenger, Gray & Christmas.

The Challenger firm, which releases monthly statistics on layoffs by Internet companies, said the March total of 1,549 was up 131 percent from the 670 job cuts it tallied in February.

Despite the uptick, the March figure was lower than January's 1,802, and it was significantly less than the 9,533 job cut announcements Challenger recorded in March 2001.

Dot-com job losses for March were lower than any month since April 2000 -- when the infamous Nasdaq "correction" started the cycle of Internet sector layoffs.

The rush of layoffs peaked during a 10-month period from October 2000 to July 2001, when 107,851 dot-com employees received pink slips. The worst month was April 2001, when the Challenger firm tallied 17,554 layoffs.

The sector has stabilized since April 2001. That disaster was followed by five consecutive months of declining job cuts before bouncing back up from September to October in the wake of the Sept. 11 terrorist attacks. That uptick was followed by another four months of declining job cuts before this month.

The Challenger firm said dot-com layoffs for the first quarter of this year totaled 4,021, 88 percent lower than the 34,010 recorded for the same period in 2001.

This month's layoffs were predominantly in the financial services and consumer services sectors - which could be a harbinger of more bad news to come, the firm said.

"We probably will see more and more job cuts being announced by companies with old economy roots which quickly expanded onto the Internet - banks, traditional retailers, media outlets, etcetera.," John Challenger, the firm's CEO said in a prepared statement.

"These companies were the last to get on the bandwagon and will be the last to get off, mainly because they have a stronger financial base from their primary, non-Internet business," he continued. "But even with this added safety net, they will only continue their Web offerings if there is viable proof that it will help the company make more money.

"It cannot just be a convenience for consumers that constantly loses money."

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