February dot-com job cuts lowest in two years

The number of dot-com job cuts fell to 670 in February, the lowest in nearly two years, according to Chicago-based outplacement firm Challenger, Gray & Christmas.

Nearly half those cuts occurred in the financial industry, followed by consumer services and the technology industry, which usually led the way in dot-com job cuts.

The February cuts were the fewest reported since April 2000, when 327 dot-com jobs cuts were announced, Challenger said.

The outplacement firm said the news may indicate that the Internet downfall may be bottoming out.

Last month's cuts were 62 percent lower than the 1,802 announced in January, Challenger said.

Dot-com job cuts peaked at 17,554 in April 2001, but have declined every month since, except for October.

The number of dot-com job cuts last month was substantially lower than the 11,649 cuts announced in the dot-com sector in February last year.

Since Challenger began tracking the dot-com job cuts in December 1999, 144,912 cuts have been reported, the firm said. Most of those cuts were announced between November 2000 and June 2001.

But Challenger said the dramatic decline in job cuts is not necessarily good news for the sector.

"Its ranks have been decimated, and right now there is no indication that we are going to see a major rebound in hiring," said John A. Challenger, the firm's CEO. "Companies that survived the collapse did so by cutting back to the bare bones and, despite these measures, many are still waiting to see their first profits. It could be years before the Internet begins to live up to its potential."