Layoffs, Layoffs And More Layoffs

(Originally posted Jan 28, 2009)

(Following my previous post on companies announcing layoffs)

The layoff announcements keep coming, and will probably keep coming over the next 6 months.  Some notable ones:

I had already chronicled how Caterpillar was cutting pay to manage costs.  Well, turns out they should have waited a bit... the cost cutting continues, with another 5,000 layoffs announced (in addition to 2,500 full-time and 8,000 contract employees having already been asked to leave).

UAL, United Airlines' parent, is laying off 1,000 people - it had recently (Q4 of 2008) laid off 1,500. 

Sprint Nextel is cutting 8,000 jobs.  Ouch!  I blame their tv ads (I hate the Sprint, and the Verizon ads).

Tens Of Thousands Laid Off On Jan 26th

(Originally posted Jan 26, 2009)

Jan 26, India's Republic Day (get out, you Brits!), turned out to be a painful day in the US. 70,000 employees are going to be laid off as a result of Monday's announcements.  Among those making the rounds:

General Motors is cutting 2,000 jobs in Michigan and Ohio plants

Home Depot is laying off 7,000 people, and closing its Expo chain and some other smaller locations. 

Texas Instruments is laying off 12% of its employees - 3,400 people.  Demand for their chips has softened, given that virtually every downstream sector that is a customer (including cell phones) is experiencing soft demand, and high inventory.

Blue Screen Of Death - Microsoft Layoffs

(Originally posted Jan 23, 2009)

Microsoft profit dropped 11% - thats quite huge.  And finally, the long-rumored layoffs are coming.  5,000 people in the next few months.  (1,400 have already been asked to leave) 

It isn't a huge number for a company of Microsoft's size (about 5%), but it is a little unprecedented.  This is the software behemoth's first-ever layoff (at least as far as I know.  I'm not counting layoffs from acquired companies, of course.

Microsoft has a process where under-performers are constantly weeded out, a la Intel.  This will probably continue, and might even get increased - so who knows the true employee turnover to come?

And another (not unexpected) wrinkle - Microsoft is still hiring.  I have a (really smart!) friend who has just joined their Search team.  This makes sense, of course, but doesn't make it easier for those laid off to swallow.

The World Hasn't Ended... Yet

(Originally posted Jan 18, 2009)

Yes, the world hasn't ended.  The economy is still not completely in the toilet.   But some early signs are coming...

- Google had a layoff - the big G has laid off 100 HR folks.  Makes sense, since they aren't hiring.  they've also shut down their recently opened Austin office.

- Steve Jobs is sick, and has taken 6 months off.  Apple stock got clobbered as a result.  And suddenly the prospect of a religion without its chief prophet has become all too real

Ouch.

Not Even One Laptop Per Child

(Originally posted Jan 9, 2003)

OLPC, or One Laptop Per Child, has laid off half its workforce (~32 people).  The remaining employees will also probably get pay cuts.

Ouch

LiveJournal Dying

(Originally posted on Jan 7th, 2009)

LiveJournal today announced a "restructuring" in their US (San Francisco) office.  All product and engineering team members are gone, top to bottom.  Only technical operations (keep those servers humming, boys!), legal, admin and customer service teams are staying... as of now. 

SUP, the Russian internet startup that bought LiveJournal in 2007 for $30 Million, will probably start consolidating all tasks in Russia.  LiveJournal is quite popular, but just like all other social networks (except MySpace), has failed to figure out how to make money.

LiveJournal is just the latest social network to start going under.  Some others I've covered (a sample of the pain in social networks) are:

• Hi5,  which represents the second tier of social networks after Facebook and Myspace
• LinkedIn, representing the business social networks
• Sneakerplay, representing the ultra-niche networks
• Ning, representing the overly funded network enablers
• Zivity, representing the adult social networks  (yep, it really is a downturn)
• And, of course, Facebook's theoretical value falling (theoretically) from $15 Billion to $1.5 Billion. 

Quite painful, unfortunately. 

Ning And Glam - Cost Cutting Time

Ning and Glam Media are two companies that have a lot of funding - over $100 Million each. 

Ning is also a lean company - they have a lean staff, and everyone works really hard (even by Silicon Valley standards).  I visited their office a couple of weeks back.  They have a normal office as startups go, except for the enormous monitors each person gets.  If you work at Ning, watch Hulu at your desk, no need for a big screen tv!

And Glam has all sorts of claims of success.  CEO Samir Arora is a consummate salesman and PR guy. 

But such are the times, both of these companies, awash in capital, are cutting down on costs.

Glam is reducing everyone's salaries - 3% - 15% for the employees, 25% - 60% for Samir and some top execs and sales people.  They're replacing this with a variable bonus element.  It is a good idea... but might still lead to some top people defecting.   Glam has also started delaying payments to partners and publishers even further.  Hopefully, this doesn't drive any partners out of business, or causes them to scale down their business - because that would come back to haunt Glam.

And Ning is rumored to be readying itself for layoffs, or other cost cuts as well.  This is completely unconfirmed, but several valley folks (none of whom work at Ning) are talking about it, as is FuckedStartups.com.  Hope its not true, but......

Scary times, my friends.