The news has been peppered with announcements of massive job cuts globally.
The run started with the revelation that Blackberry, formerly the jewel in the crown of the Canadian tech industry and widely used in corporate circles was axing 40 percent of its workforce as a cost containment measure on the back of a loss of almost $1bn in its fiscal second quarter. Blackberry stated that the lay off of 4,500 employees was to cut costs by 50 percent.
On the heels of the Blackberry announcement comes Siemens saying that it will axe 15,000 job. The German industrial giant announced the layoff as part of a cost-cutting programme with 4% of its 370,000-strong workforce being given the option to walk. Siemens aims to avoid compulsory redundancies. 5,000 jobs in Germany and another 10,000 jobs abroad will go. Siemens has issued two warnings about profit margins during the last fiscal year, sending shares lower.
Now we hear that Toshiba’s smart TV division will soon cut its staff and cease production at two factories, Toshiba plans to cut 50 percent of staff in its television division, eliminating 3,000 jobs in the process (PDF). In addition, Toshiba will close two of its three TV-production facilities in China, Indonesia, and Poland. Toshiba didn’t say which facilities will close. Despite the cuts, Toshiba doesn’t necessarily plan to cut down so drastically on TV production itself. The company says that it will increase its outsourcing for TV production from 40 percent of its total production to 70 percent.
Earlier this year Symantec axed 1700 jobs in June, the disclosure didn’t come as much of a surprise, as Symantec first talked about the reorganization strategy in January amid its fiscal third-quarter earnings announcement. The big target in June was middle management. As did HP with 15,000 targeted by CEO Meg Whitman out of the 350,000 person workforce. IBM was also described as having trimmed its workforce, without any specifics being publicly known. An insider organization called Alliance@IBM stated that more than 3,000 employees have have been laid off this year, with more cuts possibly on the way. EMC was pegged for laying off more than 1,000 people as part of a restructuring designed to slash $80 million in spending.
Electronics firm Sharp started cutting 5,000 jobs as part of its three-year restructuring plan in efforts to survive as announced in May, some 10% of its workforce of 51,000.
All these announcements along with the lesser numbers from Zynga, Autodesk and Fab perhaps suggest that there is a shake up going on in the tech sectors despite a largely robust economic outlook globally.
Although the Siemens layoff is easily viewed as something more broad spectrum than technology, the specifics of the divisions and the roles to be axed have remained elusive. Earlier this year Network World writer Bob Brown suggested that the bloodiest layoffs were HP, IBM and EMC prior to the Toshiba and Blackberry announcements.
In a buoyant economy middle performers and high cost employees are always at risk, particularly in markets where ‘at will’ employment contracts exist however the Siemens announcement is particularly interesting because the German employees in particular are likely heavily unionized especially if they are part of the industrial divisions. Per the WSJ Siemens, itself makes products ranging from high-speed trains to wind mills and gas turbines to medical equipment. 2,000 layoffs will come from the company’s industry division and 1,400 each from the energy and infrastructure and cities divisions. The health-care division won’t be affected because it carried out its own ‘restructuring’ a year earlier, serving as the prototype for the rest of the company.
Its dozens of subsectors are grouped into four main divisions: industry, energy, infrastructure and cities, and health care. Besides the layoffs, Siemens will likely spin off less profitable divisions such as airport luggage systems, water technologies and mail automation.
Siemens spun off its Osram Licht AG lighting business and sold its share of the networking technology business Nokia Siemens Networks to its joint-venture partner Nokia Corp who in turn have sold their handsets division to Microsoft. Nokia recently disclosed it had exercised its option to draw down the €1.5bn of financing Microsoft made available as part of its acquisition of Nokia’s devices and services business by issuing three tranches of senior unsecured convertible bonds with a value of €500m each in order to pre-pay the finance it had raised to buy out Siemens’ 50 percent stake in the Nokia Siemens Networks joint venture this August for €1.7bn. The financing was made available to Nokia as part of Microsoft’s agreement to acquire Nokia’s devices and services business last week for about €3.79bn, along with a €1.65bn deal for licensing Nokia’s patents.
The market could be ripe for a few startups to pick up some veterans if they are motivated and interested.
