Around 13,000 jobs in the technology industry were cut on Thursday 4 December alone, and industry forecasts suggest that the near future is not looking bright.
Online video software firm Real yesterday announced that it will cut 7.5% of its employment base, which amounts to around 130 staff.
“The layoffs, in addition to other cost-cutting measures, are part of a budgeting process intended to bring expenses in line with current and prospective economic realities,” said Bill Hankes, corporate communications vice president at Real, in a blog posting on the company site.
“While our business has not been affected as much as others, we are not immune to what’s going on in the broader economy.”
Digital media firm Viacom said in a statement on Thursday that it will reduce its headcount by approximately seven per cent, or 850 positions, and will suspend senior level management salary increases for 2009.
“The changes we are making in our organisation and processes will better position Viacom to navigate the economic slowdown,” said chief executive Philippe Dauman.
But the biggest cuts by far came from telecoms giant AT&T, which announced that it will cut roughly 12,000 employees from its ranks. The reduction accounts for some four per cent of the company’s staff, and could cost $600 million (EUR*473 million) in severance expenses.
On the same day, Nokia announced cost-cutting measures and lowered its estimates of fourth-quarter market share of mobile devices, which it said was unlikely to meet its third-quarter share of 38%.
“The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility and decreased availability of credit, ” said a Nokia statement.
But the phone company has plans to increase its market share in 2009, including its share in smartphone devices, which analyst firm Gartner said yesterday had reached their weakest year-on-year sales growth since it began tracking the industry.
“The current economic climate is negatively impacting sales of higher-end devices,” said Roberta Cozza, principal analyst at Gartner.
“Although leading mobile operators are subsidising more smartphones to reach lower prices, they tie the device to two-year contracts with monthly data plan rates which remain too expensive for the mainstream user.”
On Wednesday, Adobe announced it had revised its fourth-quarter 2008 revenue from a target range of $925 million to $966 million (€730 million to EUR762 million) to a lower range of $912 million to $915 million (€719 million to €722 million). The software company also announced that it would lay off 600 full-time staff.
And research firms have only deepened the industry uncertainty. One of the leading research authorities on consumer technology, the Consumer Electronics Association (CEA), has revised its projected industry growth for the fourth quarter of 2008 because consumer spending is falling despite the holiday season.
The CEA originally anticipated 3.5% growth for the fourth quarter of 2008 compared with the same period last year, but has now lowered this to 0.1%.
“Although the CEA certainly took price declines and weakness in consumer demand into consideration, the severity and the speed of declines in these unprecedented times caught everyone off guard,” said Jason Oxman, senior vice president of industry affairs at the CEA.
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