In October, job cuts advanced by 5,677, a new record for a
single month and the fifth consecutive month of increases,
according to the research of Challenger Gray & Christmas. It
added that 22,267 dot.com job cuts have been announced since
December, 1999, when the firm began tracking such data. 16% of all
dot.coms reviews failed since last December.
Services, such as consulting, financial, and information,
suffered the most cuts since December. Retail was second, health
and fitness third.
Viewing the state of dot.coms from the perspective of the CEO
and the employee, John A. Challenger, chief executive officer of
Challenger, Gray & Christmas, said:
“The upcoming holiday season is bearing down
on the B2C [business to consumer] dot.coms. Heading every dot.com
CEO's priority list is the need to generate enough paying customers
to hit critical mass. Both investor and employee concerns are
centred on ‘turning the corner’ - reaching a point when the
business turns profitable. Many of these new companies will fail
and disappear. Some will be acquired by traditional companies
hoping to integrate an e-commerce presence quickly into their
current operations. Others will be purchased by leading companies
hoping to build enough revenue to get over the hump.
“The 3.9 unemployment rate offers B2C
dot.coms some hope. Traditional retailers may soon be in a panic to
find people. Customer service will suffer and shoppers may turn to
the Internet. The smartest e-commerce companies have diligently
built their internal operations to handle the holiday order flow.
Happy customers who find the product they need at a reasonable
price, and receive it through the mail promptly, may finally become
‘sticky,’ loyal longer term customers.
“Dot.com employees are becoming increasingly
restless. Stocked refrigerators and pinball machines cannot
continue to serve as an antidote to long hours and poor pay.
Holding on to talented employees at levels other than the very top
is becoming almost impossible. Attracting old economy
business-building experts is getting tougher and tougher. The worst
of the shakeout, especially in the B2C area, may very well arrive
with the holiday season, but the strongest companies will later
prosper as consumers find it easier to identify the long-lasting
brands.”
Troubled on-line music retailer Boxman.com is one of the most
recent European casualties. It failed to find a buyer for its
business and laid off its 120 staff on Monday of this week. The
company said it was put out of business by the unexpected "violence
of the market downturn".
In the US, Stamps.com, an internet mailing services company,
announced this week that it is cutting 240 jobs in an effort to
reach profitability.
