This seems like the classic overshoot... But given the requirement to respond to quarterly earnings reports and that lay-offs have been identified as the market stroking response there would seem to be a more or less bottomless ratcheting down of the sector and at some point its not just the tech sector absorbing the punishment but all the folks who invested in, provided services to, provided supplies for the sector and those who used to be employed within it... Hmmm... M ----- Original Message ----- From: "James Beniger" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Thursday, July 26, 2001 7:18 PM Subject: <toc>--Technology Companies Slash 31,000 Jobs Worldwide (K Kaplan LATimes)> > > -------------------------------------------------------------------------- - > Copyright 2001 Los Angeles Times > -------------------------------------------------------------------------- - > http://www.latimes.com/technology/la-072701tech.story > > July 26 2001, 6:44 PM PDT > > > Technology Companies Slash 31,000 Jobs Worldwide > > By KAREN KAPLAN > > Times Staff Writer > > > A host of beleaguered technology companies announced a staggering 31,000 > worldwide job cuts on Thursday, marking one of the worst days for layoffs > since the tech bubble burst a year ago. > > Thursday's moves from a variety of tech titans, who already are slogging > through the worst year in the industry's history, caused analysts to > wonder whether the carnage would get even worse. > > "I don't think anybody has the faintest idea," said Richard Shaffer, > principal with Technologic Partners in New York. "My guess is the CEOs > who are doing it are clueless. When sales start to tank, they don't know > what else to do." > > More than 300,000 tech jobs, nearly 40 percent of the U.S. total, have > been eliminated in the first half of this year, according to Challenger > Gray & Christmas, a Chicago outplacement firm. Along the way, the tech > industry has fallen from its position as the U.S. economy's hero to being > its Achilles heel. New orders for equipment like personal computers and > other gadgets have shrunk at their fastest pace ever-- 49.2 percent on an > annualized basis-- in the last year, according Moody's Investors Service. > > "When times get tough, people don't buy the new car, they don't buy the > new PC, and they don't buy the new Palm," Shaffer said. > > Business spending is off just as sharply. Telecommunications companies, > which are drowning in a surplus of equipment amid plummeting demand, > reported the deepest cuts on Thursday. > > French telecom equipment maker Alcatel SA said it would shed more than > 10,000 jobs in addition to the 5,800 cuts announced earlier this year. > San Jose-based JDS Uniphase, which makes fiber-optic components, added > 7,000 workers to its previous tally of 9,000 layoff victims. And Silicon > Valley bellwether Hewlett-Packard Corp. announced 6,000 layoffs as it > warned that its revenue would be well below Wall Street's expectations > because of plunging consumer sales. > > A handful of smaller companies, including German chipmaker Infineon > Technologies, New Jersey communications software maker Avaya Inc., El > Segundo, Calif.-based International Rectifier, and data storage device > maker Quantum Corp. of Milpitas, Calif., announced additional cuts > totaling 8,000 jobs. > > The tally from tech companies on Thursday alone exceeds by nearly one > third the 24,356 U.S. layoffs announced by companies during all of last > week, according to International Strategy & Investment Group in New York. > > Even mighty Microsoft said Thursday it would add fewer than 4,000 new > jobs between now and next June-- half as many as it added in the previous > year year. > > Weekly U.S. layoff announcements peaked in late April at 60,954 and have > trended sharply lower since then, averaging a relatively meager 23,762 > cuts in the last four weeks, according to ISI. But now some industry > experts are predicting that trend will reverse. > > The news from Hewlett-Packard, in particular, spooked Fred Hickey, editor > of the High Tech Strategist newsletter in Nashua, N.H. If H-P is ready to > cut 6.5 percent of its work force, he said, other companies may soon > follow suit. > > "They all believed there would be a second-half rebound, so they were > slow to lay people off," Hickey said. Now that it's clear that the > business climate isn't likely to improve until next year, they could > could follow with more job cuts. "There's plenty more people to be laid > off in these companies." > > There are about 130 million jobs left in the U.S. economy. Nationwide, > the unemployment rate stands at 4.5 percent, still low by historical > standards. > > "I don't believe 4.5 percent unemployment is going to be the low for the > cycle," said Hickey, who expects the bad news to keep dragging out over > the next several quarters at least. > > But layoffs tend to be a lagging indicator. By the time they are > announced, companies typically have experienced the worst in the previous > three months or so. > > Michael Reynnells, associate managing director at ISI, said he expects > the layoffs to keep coming, though not necessarily to jump back up to > levels seen in the spring. > > "The company news is pretty bleak, and that doesn't really foreshadow any > great improvement in layoff announcements," Reynnells said. "As long as > companies are under this kind of pressure, there's always going to be > that looming layoff announcement. Maybe the worst is over, but it doesn't > preclude more of these things." > > The layoffs are hitting especially hard at telecommunications equipment > firms, which saw record sales volumes abruptly disappear as the Internet > economy soured, pushing smaller phone companies and other customers into > bankruptcy. > > Until the dot-com boom went bust, nearly every start-up with funding was > buying routers, switches or other communications hardware to handle > corporate data, Internet traffic and e-commerce transactions. Phone > companies also joined the buying spree, adding more hardware and > high-capacity lines to handle the rocketing data traffic. > > When the high-tech fortunes collapsed, equipment makers were unprepared > for the sudden reversal. The ripple effect has extended beyond the > equipment companies to their component suppliers, hitting hard at chip > makers and fiber suppliers alike. > > The financial crunch was made worse at equipment maker Lucent > Technologies Inc. and others because they had provided billions of > dollars in equipment loans to firms that ultimately failed. Lucent has > responded in breathtaking fashion. > > After announcing 19,000 layoffs earlier this year, the company said > Tuesday it would slash its work force by an additional 15,000 to 20,000 > workers. Lucent also eliminated 17,000 positions by spinning off its > semiconductor and optical components division into a separate company. > When the cuts are done, Lucent will be left with 57,000 employees, less > than half the 123,000 workers who began the year with the company. > > > http://www.latimes.com/technology/la-072701tech.story > -------------------------------------------------------------------------- - > Copyright 2001 Los Angeles Times > -------------------------------------------------------------------------- - > > > ******* > >
