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Underscoring Difficult Economic Times, Layoffs at Leading Tech Firms
[January 15, 2009]

Underscoring Difficult Economic Times, Layoffs at Leading Tech Firms

Group Editorial Director
 
Motorola announced it will cut another 4,000 jobs this year, in addition to the 3,000 jobs that were eliminated last year.
 
Company officials expect “ the move will save about $700 million a year starting in 2009, and total $1.5 billion in annual savings when combined with the previous cut.”
Most of the jobs at stake are reportedly associated with the mobile devices business, with roughly 1,000 jobs tied to corporate functions and other business units.
 
Motorola has been struggling recently in the face of tough economic conditions and fierce competition from the likes of RIM, Nokia (News - Alert), and other mobile handset players.
 
Motorola also announced preliminary results for the fourth quarter of 2008ahead of the formal announcement due February 3, 2009.

 
Mobile Devices shipped approximately 19 million units, with sales adversely impacted by continued weakness in end consumer demand and customer inventory reductions.
 
Officials did point to one seemingly bright spot, saying that “Enterprise Mobility Solutions and Home and Networks Mobility businesses continued to perform very well in a challenging environment.”
 
Looking at total sales for the quarter, Motorola expects that figure to be in the range of $7.0 billion to $7.2 billion.
 
Analyst estimates are slightly higher, at $7.5 billion, but of the 25 analysts polled, the estimates range from $7.0 billion to 8.08 billion.
 
In a rare move, Google (News - Alert) also announced they were laying off employees.
 
Writing on the Official Google Blog, Vice President of People Operations, Laszlo (News - Alert) Bock, wrote:
 
As we made clear during our last quarterly earnings call in October, Google is still hiring but at a reduced rate. Given the state of the economy, we recognized that we needed fewer people focused on hiring.
 
Our first step to address this was to wind down almost all our contracts with external contractors and vendors providing recruiting services for Google. However, after much consideration, we have with great regret decided that we need to go further and reduce the overall size of our recruiting organization by approximately 100 positions.
 
Google also announced they would be consolidating some office locations.
 
As Alan Eustace, Senior Vice President, Engineering & Research writes:
 
Last September we asked engineers in Phoenix, Arizona to move to other offices, and the vast majority have done so. This move enabled us to build larger and more effective teams, reduce communication overhead, and give engineers increased options for future projects. Today we are doing the same thing in Austin, Texas; Trondheim, Norway; and Lulea, Sweden. Our strong desire is to keep as many of these 70 engineering employees at Google as possible. However, we do recognize the upheaval and heartache that these changes may have on Google families, and that we may not be able to keep 100% of these exceptional employees.
 
Our long-term goal is not to trim the number of people we have working on engineering projects or reduce our global presence, but create a smaller number of more effective engineering sites, which will ensure that innovation and speed remain at our core.
 
In this environment no one is immune, as the Wall Street Journal reported that even Redmond software giant Microsoft is mulling job cuts.
 
The Journal article cited Microsoft (News - Alert) CEO Steve Ballmer as saying that the economy is forcing Microsoft to think seriously about cost cutting measures.
 
No official word yet on whether the rumored cuts will come to pass. 

Greg Galitzine is editorial director for TMC’s (News - Alert) IP Communications suite of products, including TMCnet.com. To read more of Greg’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Greg Galitzine

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