Since my last post mid-month, we’ve seen some acceleration in tech layoffs, and the overall jobs picture continues to look poor. Another 588,000 applied for initial unemployment benefits overall this week, which was worse than experts had forecast. The continuing rise of unemployment claims indicates the recession continues to intensify, and we’ll get a solid picture Friday when gross domestic product (GDP) numbers are released. So, who’s on the chopping block this week? Time Warner has announced it would cut 700 jobs, which would be about 10 percent of its workforce. SAP will be taking a similar route, cutting about 6 percent of its workforce during the year, which would amount to about 6,000 jobs. Sprint Nextel has the deepest cuts that we’ve seen: about 8,000 jobs or 14 percent of its workforce. With the deterioration of the financial position of the consumer, and confidence continuing to fall — there still appears to be no clear end in sight to the downturn, which means companies will continue to layoff at alarming rates well into 2009.
Tag Archives | layoffs
Folks, I have to say the rate at which these layoffs are coming lately is beginning to seriously worry me a little. While we focus here on technology, forgive me a moment while I stray a bit. Across the economy layoffs — as pointed out by this CNBC article — have increased dramatically after the New Year.
The reasoning? After a holiday season that was more about denial of our economic situation rather than facing reality, companies are looking at their balance sheets and realizing what bad shape the US economy is in. So the first reaction is to cut costs, and that nearly always means layoffs.
Motorola? They’ll be cutting another 4,000 jobs due to weak handset sales. Autodesk’s balance sheet is deteriorating, so it has decided to cut its workforce by 10 percent, which leaves about 750 without a job.
Seagate is set to lay off 2,950, which would be 6 percent of its workforce. Worse yet, some employees will see their salaries cut by as much as a quarter. Oracle and Lexmark are both cutting 250 apiece, and I’m sure we’ve only just begun. Sad to think we’re only 15 days into 2009, and its already this bad.
What’s more worrisome is that when stuff like this happens, spending on advertising also drops. Take for example Federated Media, Technologizer’s ad partner. The company announced that it’s laying off staffers who were focused on traditional display advertising in order to focus on more “conversational” social-media marketing initiatives. The weak market for display ads inevitably means less ads on at least some of the tech sites that are dependent on them for revenue.
What does that mean for those publications? Obviously, they’ll start letting go of writers. It’s just like dominoes.
This recession is by no means over: we aren’t even to the worst part yet. President-elect Obama is going to inherit one hell of a mess, that’s for sure.
Happy New Year Technologizer readers. Of course we have to start 2009 off right with some fresh layoff rumors from the world of tech, and this time it’s coming from Redmond.
Yes, Microsoft. The one who likes to point out it never lays people off (well at least officially). It’s no small pruning either: anywhere from 10 to 17 percent of the company’s workforce will be let go–or so the scuttlebutt says.
Pink slips are set to be handed out January 15 if you believe what’s being written, which would put it a week before the company announces its quarterly earnings.
The company is declining to comment on the reports, calling them “rumors and speculation.” Nobody seems to have any way to confirm it either, so I guess we’ll have to wait for folks to begin walking out of their offices with cardboard boxes in tow. If they indeed do.
We’ll probably find out sooner than that, however, as Microsoft is mandated by securities law to inform stockholders of actions that may affect its stock price within 24 hours.
Blogger Mini-Microsoft seems to think that layoffs may not be in the cards, however at the same time he seemed to suggest that the pullbacks might come in another way, such as reorganizations, phasing out of projects, and the like.
I guess we’ll see what happens, no?
I suspect that many folks shared my immediate reaction to today’s sad news that Sony will lay off 560 Pennsylvania factory workers and end TV production in the U.S.: utter astonishment that Sony was still making TVs in the U.S. at all. Or, for that matter, that anyone still made TVs in this country. Or consumer electronics devices of any sort, actually. (At least there’s still such a thing as an American-built PC, thanks to Dell and other companies, though I kind of suspect I may live to see the closure of the last U.S. computer factory.)
As far as I knew, the end game for the once proud domestic consumer electronics manufacturing industry came years ago; if I’d known I could still have bought a TV set made stateside, I would have tried to do so. (The Sony plant wasn’t even all that old–it was founded to build projection TVs in 1990, and later switched to LCDs.)
With the Sony plant’s shutdown next February, anyone know if there’s a single gadget left that will roll off an American assembly line? Buying stuff from icons of American industry like HP and Apple doesn’t help–not only do most of their products originate in Asia and elsewhere, but they’re generally made by contract manufacturers.
Web Guild has an item about Google possibly shedding some of its reported 10,000 contract employees that has spawned stories with alarming titles like “Google Layoffs: 10,000 Jobs Being Cut, Report Claims.”
I believe that Google may get rid of some of its contractors–which is no leap of faith on my part, since cofounder Sergey Brin has said it wants to thin the contracting herds. But I’d be stunned if 10,000 heads were to roll. That’s apparently all of Google’s contractors, and a third of its staff, period. And the Web Guild story, while squishy, never says that 10,000 jobs will go away. It just that “up to 10,000 jobs could be on the chopping block according to sources.”
Palm sure is having a rough go of it. For all intents and purposes, the company is getting it from both sides as intense competition from Apple eats into its already lagging market share and the economy worsens. This adds up to a lot of pressure on the company’s bottom line, and whenever that happens you know layoffs are not far behind.
Valleywag is reporting that Palm will layoff about 10 percent of its workforce. The company is confirming that the reports of job losses are correct, however it wouldn’t confirm the number. With about 1,000 employees, this would mean about 100 or so will find themselves out of work really soon if the reports are correct.
I can’t see why they would not be. Look at the company’s stock price. It has taken an absolute beating, falling from a September high of around $8.50 a share in September to $2.24 as of the stock market close Friday. That means the company has lost nearly 75% of its market value in just two months.
Secondly, the market share issue. Just using enterprise market share shows how fast Palm has fallen. In February 2007, the company held about 22 percent of the market, according to ChangeWave Research. Now, it holds only five percent. Compare this to Apple. It has gone from no market share to 22 percent in that same period.
Pretty obvious where Apple is getting its newfound marketshare from, isn’t it?
Add to this that the company is currently undergoing some restructuring under new chairman Jon Rubenstein, and the layoffs do make sense. Of course, these are happening at a horrible time, and its going to be tough for folks handed the pink slips to find comparable work.
Bottom line is it has to be done. The company is quite vulnerable right now, and if it does not act quickly, it could find itself in a whole its not going to be able to dig itself out of.
While a lot of the talk about job losses have centered around jobs within the IT sector itself, us technology journalists aren’t immune to the pain. You could call it collateral damage of sorts, where the problems trickle down into the media.
Companies make less money, which in turn means less in the advertising budget. That in turn means many media outlets (even Technologizer) see less income in terms of advertising dollars spent. What happens when this occurs? Layoffs of course.
This week’s highest profile job cut comes from Conde Nast, who operates several tech news properties. It’s largest is Wired, but it also includes Ars Technica, which it acquired in May for $25 million.
According to Conde Nast spokespeople, the layoffs are coming across all divisions of its web publication arm, including non-tech sites such as Epicurious and Style.com. No details have been given on just how big these cuts will be, as discussions on whats going to go are still ongoing.
News sources indicate as many as 30 percent of the total CondeNet workforce may have been let go, but that is not confirmed by the company. It’s not only freelancers which are seeing the cuts, it looks like its salaried writers and editors as well.
While I am not a big fan of Ars Technica and Wired for several reasons, I can’t help but feel bad for these folks. I am somewhat in the same boat too at this moment, trying to find regular full-time work. I can tell you for as bad as it is in the regular economy, it’s much worse in the media.
Nobody’s hiring, and if they are, you better be prepared to take a substantial paycut. Plus, freelance work is also drying up, as publications leave go their full-time writers and those folks flood the freelance market in an attempt to make ends meet.
It’s tough out there.
Update: News.com reports that 3 of the 28 Wired.com writers have been laid off, although it apparently was not any of the staff writers. PaidContent followed later indicating the entire Ars Technica staff would keep their jobs, and that Conde Nast may be looking for new acquisitions “if the price is right.”