As the body count of failed dot-com companies continues to rise this year, so does the number of job cuts made by Internet ventures that have gone out of business or laid off workers in an attempt to remain solvent. A new survey released this week day put the number of eliminated dot-com jobs at more than 5,000 since December.
The survey by Chicago-based outplacement firm Challenger, Gray & Christmas found that just less than 5,400 employees had lost their jobs at 59 companies. Nearly one-third of those companies have closed their doors this year as funding for unprofitable e-commerce companies began to dry up, according to the survey.
High-profile online retailers such as Boo.com Group and Waltham, Massachusetts-based Toysmart.com collapsed this year after their investors refused to give them more money, a move that analysts have said signals the start of a shakeout period among e-commerce companies.
John Challenger, CEO at Challenger, Gray & Christmas, said in a statement that the job fallout likely will continue in the coming months, but he added that it isn't completely unexpected. "Dot-coms are merely taking the next evolutionary step, where the companies that do not produce are sorted out," Challenger said.
He did note, though, that the e-commerce business "may have reached this stage faster than any other (industry) in recent memory."
Seema Williams, an analyst at Forrester Research in Cambridge, Massachusetts, said the shakeout among online retailers isn't necessarily bad news for the workers who have lost their jobs, because demand for their services should still be high.
Employees with dot-com experience are being highly sought by traditional companies that are getting into the online business, according to Williams. "There's plenty of room for them," she said.