Bob,
Sorry to hear about your situation.
We have the same outlook where I work. Our engineering force has shrunk to a Field/Design Engineer, two Mechanical Engineers and myself as PCB Jockey/Design Engineer. We are not doing any software design unless is a bug patch. We are mostly surviving on military contracts and a few academic research grants. I blame our situation to the economy to some degree, but mostly to stupid management and unreasonable forecasts.
1. In gearing up for large production that never happened, we spent over $300K in fancy custom-made aluminum shop furniture.
2. Somebody decided to outsource everything and fired most of our skilled technicians.
3. Contract houses suggested redesigning all our PCBs with high surface-mount content for volume production.
A year went by and the only two units we ever made were the ones we sent to KEMA for certification. Now we are sitting on piles of surface-mount components we can't use, because we are back stuffing our own boards.
The $180K/year marketing guru that forecasted the numbers left with a nice parachute, no questions asked.
Worse that making a crappy product is making a good product that no one buys.

My two cents.
Tony

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