Monday, April 7, 2008
Tech Slowdown - AMD Cuts 1650 Jobs
In the latest sign that the tech sector in general and Silicon Valley in particular is feeling the pinch of reduced spending and an overall slowdown, yet another big employer slashed its workforce. The New York Times reports that Advanced Micro Devices said it would cut about 1,650 workers — about 10 percent of its work force — because of deteriorating business conditions across its business units around the globe. A.M.D. also revised downward its financial guidance to Wall Street analysts, stating that it expects its revenue for the first quarter, which ended on March 29, to be about $1.5 billion. That is an increase of 22 percent over the first quarter of 2007 but a 15 percent decline from the previous quarter. Analysts surveyed by Thomson Financial had forecast higher quarterly revenue of $1.62 billion. The company said it had not yet estimated the restructuring charge it plans to take as a result of the new round of layoffs, which a spokesman said would take place before the beginning of September. A.M.D. said that it would offer more details when it reports first quarter financial results on April 17. Analysts have estimated a net loss of $263 million, or 42 cents per share.
Last week, Dell Inc. announced that it would need to cut more than the previously anticipated 8800 jobs it planned to cut. Dell now plans to cut an additional 900 jobs by closing a plant in teh Austin, TX area. Dell aims to cut over $3 billion in costs to help boost earnings. AP reported that CFO Donald Carty said that 5,500 jobs have been cut, with 1,000 more to come this quarter. He added that with an increase in "front-line" personnel — those in positions like sales and customer support — the net reduction is 3,200. Carty also said the company plans a share repurchase of at least $1 billion this quarter after repurchasing $4 billion last quarter.
Another company which trimmed its workforce was Google Inc., which laid off 300 workers in its online advertising unit DoubleClick. This was the first ever 'major' job cut in Google Inc.'s history. The San Francisco Chronicle reports that some of the employees being laid off were being offered jobs as contractors. Google's executives recently said that they plan to scale back hiring at the company, which has mushroomed in size over a short period of time and ballooned expenses. At the end of 2007, Google had 16,805 employees, which does not take into account the DoubleClick acquisition.
400 people at Chrysler LLC are set to lose their jobs as the automaker outsources IT maintenance and support operations to India based Tata Consultancy Services and Virginia based Computer Sciences Corp. In an interview to Detroit News, Jan Bertsch, Chrysler vice president and chief information officer said that outsourcing the work will shrink Chrysler's 2,100-person information technology department, mostly in Auburn Hills. About 200 of Chrysler's 1,000 salaried technology workers will lose their jobs. The balance of the layoffs will come from the ranks of 1,100 contract workers in that department.
eBay plans to cut 125 jobs and Yahoo has already handed the pink slip to 1,100 employees. What's happening here is that all these companies are basically hedging their bets over the next year and a half. Nobody knows where the economy is headed, so they're converting full time employees into contractors, thus leaving open a window to 're-hire' them if things get better, while keeping open the option of reducing payroll costs if things go south.
Meaning that these layoffs are not exactly bad news (those laid off may not agree, but...), and it may even help Silicon Valley improve productivity by diverting the excess funds into research and product development, not to mention the fact that the remaining employees will work their butts off in order to save their own jobs.
Last week, Dell Inc. announced that it would need to cut more than the previously anticipated 8800 jobs it planned to cut. Dell now plans to cut an additional 900 jobs by closing a plant in teh Austin, TX area. Dell aims to cut over $3 billion in costs to help boost earnings. AP reported that CFO Donald Carty said that 5,500 jobs have been cut, with 1,000 more to come this quarter. He added that with an increase in "front-line" personnel — those in positions like sales and customer support — the net reduction is 3,200. Carty also said the company plans a share repurchase of at least $1 billion this quarter after repurchasing $4 billion last quarter.
Another company which trimmed its workforce was Google Inc., which laid off 300 workers in its online advertising unit DoubleClick. This was the first ever 'major' job cut in Google Inc.'s history. The San Francisco Chronicle reports that some of the employees being laid off were being offered jobs as contractors. Google's executives recently said that they plan to scale back hiring at the company, which has mushroomed in size over a short period of time and ballooned expenses. At the end of 2007, Google had 16,805 employees, which does not take into account the DoubleClick acquisition.
400 people at Chrysler LLC are set to lose their jobs as the automaker outsources IT maintenance and support operations to India based Tata Consultancy Services and Virginia based Computer Sciences Corp. In an interview to Detroit News, Jan Bertsch, Chrysler vice president and chief information officer said that outsourcing the work will shrink Chrysler's 2,100-person information technology department, mostly in Auburn Hills. About 200 of Chrysler's 1,000 salaried technology workers will lose their jobs. The balance of the layoffs will come from the ranks of 1,100 contract workers in that department.
eBay plans to cut 125 jobs and Yahoo has already handed the pink slip to 1,100 employees. What's happening here is that all these companies are basically hedging their bets over the next year and a half. Nobody knows where the economy is headed, so they're converting full time employees into contractors, thus leaving open a window to 're-hire' them if things get better, while keeping open the option of reducing payroll costs if things go south.
Meaning that these layoffs are not exactly bad news (those laid off may not agree, but...), and it may even help Silicon Valley improve productivity by diverting the excess funds into research and product development, not to mention the fact that the remaining employees will work their butts off in order to save their own jobs.
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