The layoff count in the tech industry is piling up. The list of companies cutting jobs to rein in costs is getting longer with each passing day. As the economic downturn spreads, layoffs are being heard at who’s who of the tech word. From IBM to Google to Microsoft, no tech giant seems to be unscathed by economic turmoil.
Tech giants like Intel Corp and Sony are laying off thousands of employees, while they struggle to sustain their profit margins. And the scariest part is that many analysts expect several more thousands jobs to go this year as the recession forces the industry to slash marketing and capital spending.
Here’s a peep into pink slip show of technology giants.
Google Inc has jettisoned over 5,000 temporary workers in a recent austerity drive spurred by the recession. However, the Internet search leader still intends to spend billion dollars on product research, development and acquisitions during the next two years.
The spending plans were outlined in a regulatory filing that also provided some clues about the magnitude of a recent payroll purge targeting Google’s legion of contractors and other workers who aren’t considered full-time or part-time employees.
For instance, Google revealed it has 24,400 employees, including 4,300 interns, temporary workers and contractors. This contrasts sharply with the roughly 10,000 contractors that Google co-founder Sergey Brin said the company had in October. Google acknowledged in late November that it planned to significantly reduce the number of its contractors and retain all of its full-time employees.
Recently, in a statement on its official blog, Google Senior Vice President, Engineering and Research, Alan Eustace said the company was eliminating some engineering jobs at various locations across the world.
Microsoft Corp will make the first mass layoffs in its 34-year history, cutting 5,000 jobs as demand for personal computers falls and even one of the world’s richest companies gets burned by the recession.
The company announced the cuts last week as it reported an 11 per cent drop in second-quarter profit, which fell short of Wall Street’s expectations. Microsoft shares plunged more than 11 per cent.
At Microsoft, the cuts appeared to reflect uncertainty about when times will get better. The company said it could not issue a forecast for earnings and profits for the rest of the year.
The layoffs, starting with 1,400 last week, will affect workers in research and development, marketing, sales, finance, legal and corporate affairs, human resources and information technology, and mostly in Redmond, Washington, where the company is based. The cuts are expected to touch virtually every division and include the computer programmers who write code for existing and future applications.
The software maker won’t stop hiring entirely. During the conference call, Ballmer said the company will add new jobs in the next 18 months to support key areas, including Web search, so the total number of employees will drop by 2,000 to 3,000. Microsoft employs 94,000 people overall.
The second-largest US chipmaker Texas Instruments Inc announced plans to cut 12 percent of jobs as the company copes with a slowdown in orders.
The recession and slumping demand for mobile-phone chips prompted Texas Instruments to eliminate 1,800 jobs and shed an additional 1,600 through voluntary retirements. The savings from the move, along with cutbacks at its wireless business last year, will save about $700 million a year, the company said. The job cuts, which should be completed by the third quarter, will cost about $300 million in severance payouts and other expenses.
Texas Instruments set out last year to find a buyer for a division that makes so-called baseband chips, the main component in mobile phones. The company has given up on finding a buyer and will just let the business wind down.
Slowing mobile-phone sales are hurting demand for Texas Instruments’ digital chips, which run the devices.
World’s largest technology employer, International Business Machines Corp (IBM), has cut at least 2,800 jobs last week to trim costs as customers reduce spending.
The firings took place in the sales and distribution unit and software division, according to a copy of a January 21 separation agreement sent by Lee Conrad, national coordinator for the Alliance for IBM. According to the Alliance@IBM, a member of the AFL-CIO, the largest US labour union federation, IBM cut 1,419 jobs in its software division and 1,449 jobs in sales and distribution.
Job cuts helped Armonk, New York-based IBM boost earnings last quarter as sales fell in all units except the software division. Selling, general and administrative expenses dropped 3.1 per cent to $5.83 billion in the period.
Workforce-reduction costs increased about $380 million from the year-earlier period. The company typically has annual costs related to job cuts of about $300 million to $400 million, Chief Financial Officer Mark Loughridge said last week on a conference call. The costs in 2009 will probably be in that range, though they will be weighted toward the earlier part of the year, he said.
Employees had speculated on Alliance’s website this month that there could be as many as 16,000 job cuts. IBM has frequently pruned its workforce over the past few years. It had two waves of job cuts in 2007, totaling more than 2,000 positions.
Intel Corp said that it would close manufacturing plants in Malaysia and the Philippines, as well as its only remaining factory in Silicon Valley, cutting as many as 6,000 jobs.
The announcement came a day after the world’s largest maker of microprocessors used in personal computers slashed prices on a number of its chips and a week after it reported a decline in fourth-quarter revenue.
Intel said it would close two assembly test facilities in Penang, Malaysia, and one in Cavite, Philippines. It will also halt production at a wafer fabrication facility in Hillsboro, Oregon, as well as its Santa Clara, California plant — a factory connected to its headquarters and the only one left in Silicon Valley.
The actions will result in a reduction of 5,000 to 6,000 jobs, Intel said. It ended 2008 with around 84,000 employees. Not all cuts at the affected plants will lead to job losses and some workers will be offered positions at other facilities, it said, adding that the restructuring will take place between now and the end of 2009.
Advanced Micro Devices Inc will eliminate 1,100 jobs, cut salaries and take a new $622 million charge for its acquisition of graphics chip maker ATI, bringing total writeoffs for the deal to $3.17 billion.
AMD, which trails Intel Corp in the computer chip market, said the salary decreases range from 20 per cent for its two top executive to 5 per cent for lower level employees in North America and voluntary pay cuts in other regions.
The company, which has been criticised for overpaying for its $5.4 billion 2006 purchase of ATI Technologies Inc, warned in December it would have to take an additional charge after taking a $800 million impairment charge in its June quarter and more than $1.5 billion in writeoffs taken in 2007.
As part of its cost cuts, it said Chairman Hector Ruiz and Chief Executive Dirk Meyer will temporarily take 20 per cent salary cuts, while US and Canadian executives at the level of vice president and higher will take 15 per cent cuts.
North American employees who are not eligible for overtime pay will take 10 per cent cuts, while overtime-eligible employees will see their pay reduced 5 per cent. It is also implementing voluntary pay reduction measures for employees outside North America.
Seagate Technology has replaced its top two executives and said it plans to cut 800 jobs - 10 percent of its US work force - as the hard drive maker endures a bruising slowdown in technology spending.
The company also announced that it plans to cut 10 percent of its 8,000 US-based workers. It has 53,000 workers worldwide. Seagate is the world’s largest maker of computer hard disk drives, with more than 30 percent of the global market. But its business has suffered badly because of the economic meltdown, which has sapped information technology budgets and demand for new personal computers and servers that use Seagate’s products.
Oversupply in the industry has also hurt Seagate and other disk drive manufacturers.
Dell Inc, the world’s No. 2 PC maker, will cut about 1,900 of 3,000 jobs at its manufacturing plant in Limerick in the west of Ireland.
Dell, which ranks itself as Ireland’s largest exporter, largest technology company and second largest company overall, said that it would move production of computer systems for customers in Europe, the Middle East and Africa to its Polish plant and third-party manufacturing partners.
Dell cut more than 8,000 jobs last year and struggled to regain market share it lost to larger rival Hewlett-Packard Co. It also said last year it would outsource more manufacturing to cut costs.
Seems the predictions of a tough 2009 for the cellphone market have started coming true. According to a report in a leading daily, more than 200 people Motorola India had hired just a few months ago to drive its mobile handsets business have been laid off.
The company has decided to stick to its current model of doing business through distributors, says the report. Industry sources said that Motorola paid all the laid-off sales personnel two months salary in lieu of the notice period.
The company is also reported to have issued pink slips to at least 100 of its 4,000 employees in India in December. It is, however, not clear if the current number of employees given pinkslips includes these.
The December move was said to be a part of the Illinois-based company’s earlier announced strategy of slashing 3,000 jobs, or about 5 per cent of its global workforce.
Lenovo Group said that it will lay off 2,500 workers, or about 11 per cent of its work force, as part of a plan aimed at helping the computer maker to remain competitive amid the global economic downturn.
The Beijing-based company, the world’s fourth-largest PC maker, also warned it expects to report a loss for its fiscal third quarter ended December 31.
Lenovo said the job cuts will come from across the company’s global operations. The company also plans to cut executive compensation by between 30 per cent and 50 per cent, including merit pay, long-term incentives and other performance-based payments this year.
In addition, Lenovo said it is consolidating its Asia Pacific and China operations into a single business unit. The company also will relocate its call center operations from Toronto to Morrisville, NC. Lenovo expects to save about $300 million in the fiscal year ending March 31, 2010 as a result of its restructuring plan. But it anticipates it will book a pretax charge of about $150 million, the bulk of which will be taken in its fiscal fourth quarter.
Sony is slashing 8,000 jobs, or 5 per cent of its global electronics work force, aiming to cut costs by $1.1 billion a year as a global downturn batters profits.
Sony Corp said it will cut the jobs from its electronics operations, which employ about 160,000 workers, by the end of March, 2010. It did not give a country breakdown for the layoffs. The Japanese giant has already cut production and lowered inventories, but tough times demand more drastic efforts, the company said in a statement.
Sony will end production at some plants, including one in France that makes tape and other recording media, and will continue moving electronics production to lower-cost areas. Manufacturing sites will be reduced by about 10 per cent from 57 today, it said.
The new business plan will deliver more than 100 billion yen ($1.1. billion) in cost savings a year by March 2010, according to Sony.
The company will also postpone a planned investment to boost production of LCD TVs and trim spending in semiconductors. It plans to outsource a portion of the production it had planned for image sensors for mobile phones.
Sun Microsystems Inc plans to cut as many as 6,000 jobs as the company tries to cope with plunging sales of server computers to financial firms, market-share losses to bigger competitors, and a spiraling stock price.
The reduction, which will eliminate as much as 18 per cent of the staff, will shave $700 million to $800 million from annual expenses, Sun said in an emailed statement. The moves will cost as much as $600 million in the next 12 months.
The Santa Clara, California-based company is cutting back in response to “global economic realities,” CEO Jonathan Schwartz said. Sun, the fourth-largest server maker, last month posted its second loss in three quarters and said its financial-services customers were curbing orders until they have more liquidity.
The company sees this as a chance to spread adoption of Sun’s MySQL open-source database applications and Java programming language, which are free. Sun sells servers and service contracts with the software.
The Sun job cuts will take place worldwide, with most of the US positions eliminated in the third fiscal quarter. The company had about 33,000 employees at the end of September.
German software giant SAP has declined to forecast revenue for 2009 and said that it would accelerate cost cuts to handle what it called a “challenging operating environment” this year. As a cost cutting measure the company, which sees tough conditions in H1 2009, plans to downsize its workforce.
SAP, the world’s biggest maker of business management software, said in a statement that 2008 operating profit rose 4 per cent to 2.84 billion euros ($3.75 billion) and total sales for the group gained 14 per cent to 8.46 billion euros.
The sales number was exactly in line with the average in a Reuters poll of analysts. The Walldorf-based company had told investors on October 6 that business suddenly fell off in the closing two weeks of its third quarter, which ended September 30.
Its closest competitor, US company Oracle, in December posted second-quarter results that were better than feared and gave investors reason to hope that Oracle would manage the economic slowdown relatively well.
Sprint Nextel, the third-largest US mobile network operator, will cut up to 8,000 jobs, or more than 14 per cent of its workforce in a move designed to cut annual payroll costs by up to $1.2bn. The job cuts are among the most aggressive announced by US telecommunications operators. The company, which cut 4,000 jobs last year, currently has around 56,000 workers.
The latest job cuts are aimed at making the company more competitive in the face of slowing industry growth and “financially secure in a challenging economic environment.” Sprint added that the cuts will be spread across all levels and areas of the company although customer care operations will be less affected as part of its effort to bolster customer satisfaction.
Last month AT&T, Sprint’s larger rival, announced plans to cut 12,000 jobs, or about 4 per cent of its staff. As part of its efforts to cut costs including capital spending, Sprint Nextel recently folded its embryonic nationwide WiMax broadband wireless data network into a joint venture with Clearwire and other investors.
At the same time Sprint repaid $2 billion in debt in the second half of 2008, and renegotiated its credit terms to ensure it has sufficient liquidity to pay debt coming due during the next two years.
Pressured by the economic turmoil and the mounting loss of traditional phone customers, AT&T Inc is cutting 12,000 jobs, about 4 per cent of its work force.
The Dallas-based telecommunications company, the US’ largest, said the job cuts will begin this month and run throughout 2009. The company also plans to lower its capital spending next year, and one analyst estimates that reduction could be as much as $2 billion.
The 300,000-person company has announced layoffs several times over the past few years, including in April, when it said it would eliminate 4,600 jobs, but it has been hiring at the same time. This is the first time since the company bought BellSouth Corp in 2006 that it said overall staffing would decline.
AT&T spokesman Walt Sharp said the layoffs will be “across the company and across the country,” but would not specify what departments and cities would be most affected.
Swedish telecom equipment giant Ericsson posted a stronger-than-expected fourth-quarter profit, promising deeper savings as it announced 5,000 job cuts. The company, which released the results a fourth consecutive forecast-topping report failed to give a specific business outlook. That gave analysts some pause for thought.
Ericsson’s closest rivals — Nokia Siemens Networks and Alcatel-Lucent — have forecast for the market to shrink this year as telecom operators cap spending and Asian rivals put pressure on prices. Only this month, Nortel Networks, North America’s biggest telecom gear maker, filed for bankruptcy.