NEW YORK (CNNfn) - Layoffs at Internet companies have been rising since May and could accelerate over the next three months, according to a report released by outplacement firm Challenger Gray & Christmas Inc.|
The report says the number of layoffs in dot.com sectors rose by 5,677 in October, marking a new single-month record. October also has been the fifth consecutive month of increases in dot.commer layoffs, according to the report.
Some 22,267 dot.com cuts have been announced since December 1999, when the firm began tracking such data. Of the 274 companies tracked from December 1999 through October 2000, 44 of them - or 16 percent of the total -- have since failed.
Companies providing consulting, financial or information services were the hardest hit; those companies suffered the most cuts since December, accounting for 8,113, or 36 percent of the total layoffs. Retail came in second with 5,450 cuts.
More dot.com job cuts might be in the offing, suggested John A. Challenger, chief executive of the outplacement firm, who told CNNfn "the upcoming holiday season will be a crucial time for many of the business-to-consumer companies especially. Some of those companies have been trying to stretch their capital - these types of† layoffs are part of that kind of maneuver, as they try to hold on to their cash flow."
However, Challenger suggests that e-tailers might just be able to hang on to holiday sale-related profits. "The traditional retail world is coming up on the holiday season where unemployment is the lowest we've seen since the Vietnam war. There aren't enough people out there for them to hire to man their stores, to provide the kind of service they're looking to offer. What that means is that more and more shoppers are becoming more comfortable using the internet. They might say, 'well, why go stand in long lines, why go park way out in the mall? I'm just going to go online [to shop]'. That [scenario] might offer some ray of hope [for some e-tailers]."