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Layoffs will grow and smaller firms may find they can't survive

It took longer for the slowing global economy to be felt by technology firms in Silicon Valley than it took for the impact to be felt elsewhere in the tech world. However, when the recession finally made its way to Silicon Valley, it hit many firms very hard.

DailyTech wrote that Silicon Valley first felt the economic pinch of the recession in December 2008. Reuters reports that layoffs are now mounting as many technology firms in Silicon Valley rush to strengthen their positions by reducing expenses and cutting jobs.

Silicon Valley lost 11,700 jobs last year reports Reuters, and that number is only the beginning according to analysts. Adam Charlson, senior partner at executive search firm Korn/Ferry International said, "Organizations are saying, 'What is the absolute nuclear winter? Let's plan for that.' What you're seeing now is organizations putting those plans into reality."

The loss of 11,700 jobs lost looks like a big number, but that is a mere drop in the bucket compared to the layoffs that gripped the area after the dotcom burst in 2000. Steven Levy from the Center for Continuing Study of the California Economy said that the 11,700 figure doesn’t reflect recent layoffs.

Levy told Reuters, "The headline is that the recession has hit Silicon Valley," Levy said. As a result, he said he was "substantially revising downward" employment predictions for 2009.

The jobless rate in California was at a 14-year high of 9.3 percent in December, the national average unemployment rate at the time was 7.2 percent. Some analysts see the layoffs going around the Valley as preemptive measures by firms that were too slow in cutting jobs during the last recession. Andy Miedler, a senior analyst at Edward Jones said, "Layoffs and cost-cutting are unfortunate, but companies have to make tough decisions in a rough economy to preserve their own financial position."

In 2000, many of the technology firms didn’t survive the recession that plagued Silicon Valley, this time companies are preparing for a worsening economy early. Reuters points out that layoffs in the tech hub may not be as horrible as they seem at first glance.

Engineers and researchers who have been let go from firms may decide to go to work on projects of their own, which could lead to a new round of innovation. Another bright spot in the tech industry is the so-called "cleantech" arena.

The engineers and researchers leaving technology firms may be able to find work with cleantech firms. Cleantech is widely predicted to continue to grow and offer jobs.

Out of work employees may be able to find jobs, but many of the start-up firms that are powered by venture capital may find that they can no longer survive. Reuters reports that venture capital funding fell 71 percent in Q4 2008 compared to the previous year.

These new start-ups that often provide software and services to the larger Silicon Valley firms could find that as these big companies reduce spending there is simply no alternative for fledgling companies to consider other than closing their doors.





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The domino effect
By Beenthere on 1/27/2009 10:01:15 AM , Rating: 2
No rocket science here, just the economic domino effect in operation - and it's gonna get worse, much worse.

The U.S. is losing over a half-million jobs per month. The ill conceived solution from Congress and the President is THROW MONEY AT THE PROBLEM to the tune of a Trillion dollars for Pork and Welfare jobs that will do little to help and more likely will drive us into a decade long depression.

Good job folks. Keep up the great work in DC.




RE: The domino effect
By mdogs444 on 1/27/2009 10:13:27 AM , Rating: 2
quote:
The ill conceived solution from Congress and the President is THROW MONEY AT THE PROBLEM to the tune of a Trillion dollars for Pork and Welfare jobs that will do little to help and more likely will drive us into a decade long depression.

No kidding. Pelosi honestly trying to justify $300M for contraceptives in the "recovery package"? Expansion of food stamps and welfare benefits - both of which will never be decreased after the recession, and Obamas "job creation" for government jobs...at the tune of roughly $227,000 cost per job created. Yeah...wonderful work DC.


RE: The domino effect
By Dreifort on 1/27/2009 10:18:16 AM , Rating: 2
Don't forget we still have a border issue here in the US and our population is growing faster and faster - with a lot of the new growth NOT paying taxes.

But it's nice to know that the few of us paying taxes are funding population control overseas. I don't care if you are against or pro-abortion *cough* choice... WHY are we paying for abortions overseas when we need our money to stay in OUR economy right now?


RE: The domino effect
By mdogs444 on 1/27/2009 10:24:51 AM , Rating: 2
Abortion aside, because I see that as more of a moral issue, the democratic congress honestly trying to curb the illegal immigration issue by saying they pay "payroll" taxes is pure bunk. Anyone who does not pay federal income taxes, much less not even being a legal citizen, should not be able to get medicare/medicaid, unemployment benefits, welfare benefits, or social security benefits. Period. All that amounts to is spending more than we take in.


RE: The domino effect
By Spectator on 1/27/2009 2:25:21 PM , Rating: 2
the youth of your country are paying tax's.

just in a reduced form.. they are all to busy funding WOW and others.... Still that tax on $14? is better than having a job and paying XX% on $XXXXX in earnings?..

yes im messing. but the logic is sound :P


RE: The domino effect
By Dreifort on 1/27/2009 3:21:33 PM , Rating: 2
overstating here, but for every story about jobs being lost in our country, there is a side story about some politician/nominee getting busted employing illegal immigrants.

generalizing, it sounds like Americans losing jobs, illegals gaining jobs.


RE: The domino effect
By FITCamaro on 1/27/09, Rating: 0
RE: The domino effect
By Dreifort on 1/27/2009 10:35:03 AM , Rating: 2
unless you work for Dell. You might loose your job to a Polander.


RE: The domino effect
By Spectator on 1/27/2009 2:39:16 PM , Rating: 2
Cam.. Dont mess with the Irish.

They will fight/die for principals not wealth. And as such should be awarded some respect for being English/Irish :)

And the pale women reference.. if you research, you will find that the red headed women of England/Ireland; yes pale skin + freckles are the original/oldest genetically for the countries.
Its all about lack of vitamin's or some such. but hey im happy to be a Lime'y :).

Chukkle


RE: The domino effect
By FITCamaro on 1/27/2009 3:15:30 PM , Rating: 2
Wasn't picking on the Irish. Saying they actually got their sh*t together and went capitalist and it did them a world of good.

And I'm a huge fan of redheads... ;)


RE: The domino effect
By Gzus666 on 1/27/2009 3:25:29 PM , Rating: 2
Technically Scots are the redheads, Irish tend to be blond or brown haired.


Easy solution
By corduroygt on 1/27/2009 1:23:03 PM , Rating: 2
Since the "hip" californians want to reduce CO2 emissions, which is totally unnecessary by the way, they can tax their gas to $10/gallon so they can trule live like the europeans they like to pretend to. This way both the budget deficit goes away (or significantly reduced) and they get less CO2.

I love America (I emigrated from Europe) because it's not Europe. T he American lifestyle of having big cars and houses is much better than living in a box and driving a 3 cylinder turbodiesel compact car, I know because that's what I had there. This is why the world envies us. I've been driving a Pontiac GTO for the last 35k miles, and this would have been impossible in my home country, with the taxes and fuel bills I wouldn't be able to afford. My next car will be a SUV and fuel economy isn't my concern, I emit much less CO2 than many people who have hybrids because I live 4 miles away from work, not because I care about how much CO2 I produce, but because I care about not spending my life commuting and secondarily my gas bill.

I just wish the Bush administration had toned down the religious crap and also came clean about Iraq and just said we want to secure our future oil supplies, and there isn't a damn thing you can do about it. I wouldn't be this much against the war then.




RE: Easy solution
By Spectator on 1/27/2009 2:53:01 PM , Rating: 2
Dude your from the UK?

Yorkshire Boy here. and this sht is getting silly.
Logically any sane peoples would leave now before all new TAX hits to pay for the recession.

But Saddly for us poor fookers. GBP is mega weak. I swear other countries are spanking us now. then waiting for Treasure Island to kick back into gear. :(


RE: Easy solution
By Gzus666 on 1/27/2009 3:07:57 PM , Rating: 1
quote:
I just wish the Bush administration had toned down the religious crap and also came clean about Iraq and just said we want to secure our future oil supplies, and there isn't a damn thing you can do about it. I wouldn't be this much against the war then.


Agreed. If they just would have said: hey, we are invading a country for resources, I would have been fine with that. I have no issues with wars over resources as this happens. Pretending it was for other reasons though, that was just stupid. America does pretty poorly with humanitarian efforts, we are much better at wiping people out. Ethnic cleansing would be a good idea at this point, otherwise I have a feeling radical Islam will start taking things over.


RE: Easy solution
By Reclaimer77 on 1/27/2009 5:40:13 PM , Rating: 1
quote:
I love America (I emigrated from Europe) because it's not Europe. T he American lifestyle of having big cars and houses is much better than living in a box and driving a 3 cylinder turbodiesel compact car, I know because that's what I had there.


Man that's awesome, and so true. Every time a car article comes up on Daily Tech, idiots attempt to burn at the stake anyone who doesn't want to embrace the newest euro econo-shitbox.

I wanna save this quote and use it from now on. But it would be much better if you would say it in person :)


RE: Easy solution
By corduroygt on 1/28/2009 12:01:17 AM , Rating: 2
There are some quite cool econoboxes that I wouldn't mind owning, like a mini cooper S. But what I don't like is being FORCED into buying those because taxes and petrol is so expensive that only the wealthy can afford big cars with big engines that use lots of gas. USA is great because even the middle class can afford a lifestyle that is restricted to the more wealthy in europe. They don't call it the american dream for nothing. A dream can only become reality if there aren't any communists or eco-terrorists blocking the way.


RE: Easy solution
By Reclaimer77 on 1/28/2009 12:17:33 PM , Rating: 2
quote:
There are some quite cool econoboxes that I wouldn't mind owning, like a mini cooper S. But what I don't like is being FORCED into buying those because taxes and petrol is so expensive that only the wealthy can afford big cars with big engines that use lots of gas. USA is great because even the middle class can afford a lifestyle that is restricted to the more wealthy in europe. They don't call it the american dream for nothing. A dream can only become reality if there aren't any communists or eco-terrorists blocking the way.


Quoted for truth.

More Americans need to read this. Because a lot of people just don't get it right now.


Rejoiced in 2000 and shocked in 2008...
By Dreifort on 1/27/2009 9:59:35 AM , Rating: 2
quote:
In 2000, many of the technology firms didn’t survive the recession that plagued Silicon Valley, this time companies are preparing for a worsening economy early. Reuters points out that layoffs in the tech hub may not be as horrible as they seem at first glance.


No one cares about recessions if it's "hurting" overpaid technology employees or rich CEOs. When the bubble burst for all the online companies in 2000, the news was actually saying it was a good thing saying the companies were over-priced. What? Media gave no mind to any jobs affected - the companies were artificially inflated and its good that their price comes back down or that even some companies go under in 2000? More media emphasis was on the product/service need for the company and not the need for the jobs it provided.

http://query.nytimes.com/gst/fullpage.html?res=9B0...

No mention of jobs that were actually lost. The media didn't care. It was overpaid technology geeks anyway and the Internet bubble artificially inflated their success.

..but now, the media is 24/7 job news.

One thing that assists in the unemployment rate hike having more effect is that we were coming from one of the lowest unemployment rates in decades. Under George Bush we thrived on (and were use to) 4.0% unemployment rates.

All through Clinton's years we avg'd about 6% and Bush Sr. was just under 6%. Reagan? near 7%...about same with Carter.

With the rate being around 7% again, it's a shock from the 4% we were use to for so many years. 3% in just a short time.




RE: Rejoiced in 2000 and shocked in 2008...
By mdogs444 on 1/27/2009 10:21:51 AM , Rating: 2
quote:
All through Clinton's years we avg'd about 6% and Bush Sr. was just under 6%. Reagan? near 7%...about same with Carter

I think you're leaving out some other valuable statistics. Under Carter, inflation rose as high as 11.3%, and 13.5% in 1979 and 1980. Not to mention the interest rates were as high as 22% on a house!

Whats 7% unemployment when your dollar is worth jack, and you can't afford to purchase anything because of his inflationary and interest rate debacles?


By FITCamaro on 1/27/2009 10:26:23 AM , Rating: 2
We're headed for that again. Just part of the change they promised.


By Dreifort on 1/27/2009 10:32:04 AM , Rating: 2
Under Clinton our inflation ranged from 1.5% to 3%. Same under W. Bush... from 1.5% to 3% until 2008:

Jan: 4.28%
Feb: 4.03%
Mar: 3.98%
Apr: 3.94%
May: 4.18%
Jun: 5.02%
Jul: 5.60%
Aug: 5.37%
Sep: 4.94%
Oct: 3.66%
Nov: 1.07%
Dec: 0.09%

2008: 3.85%


Prices
By GoodBytes on 1/27/2009 11:48:03 AM , Rating: 2
I don't know about you, but here in Canada prices for computer hardware sky rocketed.
I would like to buy a new computer... but the jump from 1600$ to 2300$ is kinda ridiculous (and no it's not because of currency exchange.. it didn't change from before to now...).

You know when you fall in such situation, don't you usually want to reduce your process to increase sell, which leads to be able to make more money at the end.

Someone can please clarify this to me?




RE: Prices
By FITCamaro on 1/27/2009 12:12:37 PM , Rating: 2
Prices for computer hardware here in the states have never been lower...


RE: Prices
By Dreifort on 1/27/2009 2:08:35 PM , Rating: 2
funny, the highend most wanted gaming computers seem to be made in Canada.

They (these high end gaming computers) are expensive here in US, but not like years past.

Was there any recent (yrs) change in import tax or tariffs for Canada?


RE: Prices
By Icelight on 1/28/2009 1:21:29 PM , Rating: 2
They've leveled off a bit now. It's still expensive, but that's just because the dollar is nowhere near as good as it was previously. For a lot of things now at online stores you can get parts for about equivalent to the US pricing (taking into account exchange rate). Of course, the sales are another matter...the US usually has no problem wiping the floor with us there...


Communfornia
By mdogs444 on 1/27/09, Rating: -1
RE: Communfornia
By bighairycamel on 1/27/2009 9:50:57 AM , Rating: 4
I love how everyone has to inject political bias into these topics.

Step 1 to fixing this: Quit with the friggin finger pointing

Too much time is wasted trying to argue about whether this is the fault of the liberals or conservatives.


RE: Communfornia
By omnicronx on 1/27/2009 10:01:05 AM , Rating: 5
quote:
Step 1 to fixing this: Quit with the friggin finger pointing
I agree, finger pointing never solved anything.

Perhaps Arnold should start a 'STOP WHINING!!' campaign to kick things into action ;)


RE: Communfornia
By Dreifort on 1/27/2009 10:15:27 AM , Rating: 5
if there is any true blame (congress as a whole has dropped the ball on both teams), the blame should fall on the media.

The media needs news to survive. (They have jobs too!) The country as a whole needs confidence... to keep jobs in place and have an outlook that says consumers/need will revive. The media doesn't want to report "everybody wait" news. That's boring and doesn't get ratings. But job losses by the 1000s glues ppl to their TV sets or few remaining newspapers. Overreacting never helps, but it sure sells advertising.


RE: Communfornia
By TSS on 1/27/2009 11:59:22 AM , Rating: 2
if the blame falls on the media, the blame really falls back with the consumer. if sensasionalist headlines wouldn't attract as many views as "regular" news, the reporting of that news would drop. media company's are company's too, they want to make a profit.

it's supply and demand. we, the people, demand more sensasionalist news to talk about and gossip on. where interested in seeing who died in the world today, and how horrible situations are in other parts of the world. the media only fills that demand.

any time you want to point a finger just point it right back at yourself. i've stopped watching the news on TV and of all the news i see online, i skip half of the headlines i see. if everybody did that the news would get cut just as any program with failing ratings would be cut, or forced to change.

the truth is though one of the channels here in holland with the most drama in the news also has the highest ratings of any news. i doubt it would be much different in america. or anywhere in the world. there's your problem.


RE: Communfornia
By Dreifort on 1/27/2009 3:51:24 PM , Rating: 2
uh...

quote:
if everybody did that the news would get cut just as any program with failing ratings would be cut, or forced to change.


This has been going on for sometime with MSNBC/NBC. Their ratings/revenue continues to fall. The only problem is NBC is not listening to your advice TSS. They haven't changed their presentation or hatred for a president that is out of office. Whether you agree or right or wrong, hatred is keeping Zucker/Immelt from making a profit with MSNBC/NBC news reporting (by getting viewers) and will be gone before long....at least MSNBC will.

Look at FOX News; while every network has always had some sort of bias, small or large, FOX actually has made small subtle changes that keep them at the top. O'Reilly use to be more outspoken against Obama or whoever - BUT, while he still is, he has ratcheted it down a bit. Outcome? Still #1. MSNBC would rather go belly up than revert back towards actual news coverage.


RE: Communfornia
By lco45 on 1/28/2009 2:22:03 AM , Rating: 2
In summary the problem is that, on average, human beings are idiots.
The media just acts as an averaging agent, by broadcasting whatever will attract the greatest number of viewers.

Luke


RE: Communfornia
By Spectator on 1/27/2009 2:11:24 PM , Rating: 2
Quote. Dont Fix the Blame Fix the problem.

Well that applies to the people that actually give a fuk. The rest will just procrastinate and blame others :P


RE: Communfornia
By quiksilvr on 1/27/2009 2:21:22 PM , Rating: 2
People suck.


RE: Communfornia
By Oregonian2 on 1/27/2009 8:45:04 PM , Rating: 2
quote:
I agree, finger pointing never solved anything.


Not in the short term.

But finger pointing to the cause helps in not repeating the problem -- having the same thing repeat due to the cause not being identified and fixed.


RE: Communfornia
By Aloonatic on 1/27/2009 10:01:36 AM , Rating: 2
I thought everyone agreed that it was the greedy bankers, in the library with the candle stick, that were to blame?


RE: Communfornia
By GUESS WHO on 1/27/09, Rating: -1
RE: Communfornia
By mdogs444 on 1/27/2009 10:10:26 AM , Rating: 2
quote:
Too much time is wasted trying to argue about whether this is the fault of the liberals or conservatives.

While I would usually agree - the fact is that California is not a conservative state. It is their policies throughout the states house and senate, including spending & taxation, environmental restrictions, etc that have caused this problem. Just expanding those same policies that have caused the problem are not going to fix it.


RE: Communfornia
By on 1/27/2009 10:22:13 AM , Rating: 2
You do realize that California has higher income and contributes more to the GDP than the national average right? The whole country could really make do with California's "problems".


RE: Communfornia
By mdogs444 on 1/27/2009 10:28:23 AM , Rating: 4
quote:
The whole country could really make do with California's "problems".

California is $40B+ in deficit, and has put a hold on income tax checks. The country could NOT make due with their problems...in fact, California can't even make due with its own problems.


RE: Communfornia
By FITCamaro on 1/27/09, Rating: 0
RE: Communfornia
By Dreifort on 1/27/2009 10:38:50 AM , Rating: 3
there's a price to pay to walk amongst the "cool" or "hip" crowd.

haha..

I'm happy here in Charlotte, even if our Obama elected governor hates our city. She is going out of her way to TAKE funding from our city. Nevermind we are the largest in the state. Nice job straight ballot voters!


RE: Communfornia
By amandahugnkiss on 1/27/2009 2:10:05 PM , Rating: 2
That sucks, straight ballot voters should incur a .5X penalty.


RE: Communfornia
By Spectator on 1/27/2009 2:19:01 PM , Rating: 2
Cam the same sht applies elsewhere.

Even in places like Monaco or Emirates, you can earn 2x normal wages for similar job. you just get stuck thier renting for years.

It all depends on your longer term plans. Dam we are so short sighted/fickle :P


RE: Communfornia
By Dreifort on 1/27/09, Rating: 0
RE: Communfornia
By FITCamaro on 1/27/2009 10:24:45 AM , Rating: 2
They don't have to worry anymore. The rest of the states are subsidizing their stupidity now.


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