| When I wrote about the dimming outlook for jobs | | | | under-performing areas, followed by non-essential |
| earlier this month, I quoted John Challenger, CEO of | | | | divisions such as marketing, communications and |
| recruiting company Challenger, Gray & Christmas, | | | | human resources. |
| as saying that companies were intent on cutting | | | | While just about every sector, including tech, will be |
| costs, with the implication that many of them would | | | | affected, tech may not suffer as much as it did in |
| have to cull staff to do so. | | | | the dot-com fallout, writes CNET News' Dawn |
| That's exactly what seems to be happening on the | | | | Kawamoto. That's because few tech companies have |
| West Coast, where a number of startups (as well as | | | | staffed up on the scale of the late 1990s. Without |
| bigger companies like eBay) are laying off employees | | | | the inflated hiring patterns that characterized those |
| in hopes of making it through the recession. Among | | | | pre-bust days, tech unemployment numbers are still |
| the companies making cuts, reports the Los Angeles | | | | holding true to their typical pattern, about half the |
| Times, are Zillow, Pandora, AdBrite, Hi5, Jive | | | | national average. |
| Software, Redfin, Seesmic and Zivity. Seesmic | | | | Not only that, writes IT Business Edge blogger Dennis |
| founder and CEO Loic Le Meur says that laying off a | | | | Byron, but many companies will find it difficult to |
| third of his company's staff is the only way to keep | | | | make sweeping cuts simply because technology is so |
| his company going in tough times. He likens the move | | | | well entrenched in their business. He writes: |
| to "giving myself another round of funding." | | | | "...for the first time in business history, IT is like some |
| Layoffs are a less palatable alternative to rounding up | | | | of the bailed-out companies that received all kinds of |
| capital but may become necessary for more | | | | government money in the last few weeks. That is, |
| companies as funding sources dry up. As USA Today | | | | IT is "too big to fail." IT is so intrinsic to the |
| reports, 2008's third quarter saw just 270 venture | | | | operations of every enterprise - and more |
| capital deals for tech companies, the lowest quarterly | | | | importantly, each enterprise's interaction with its |
| number since Q1 1996. Not only that, but The Silicon | | | | customers and suppliers - that its budget can't be |
| Valley venture capitalist confidence index tracked by | | | | arbitrarily cut." |
| University of San Francisco business professor Mark | | | | Will any good come of this? Some folks think so, |
| Cannice fell to 2.9, the lowest reading in its five-year | | | | including Jonathan Weber, editor-in-chief of |
| history. | | | | NewWest.Net. Writing for Times Online, Weber posits |
| Unlike previous downturns, including the dot-com | | | | that, depending on the outcome of the upcoming |
| bust, experts predict a far broader group of | | | | presidential election, the U.S. government could step |
| industries will be affected this time. Cathy Paige, a | | | | in to bolster the tech economy by funding more |
| vice president of Manpower, tells BusinessWeek that | | | | basic research that can lead to technological |
| "this is an equal-opportunity recession." For most | | | | innovation and by tweaking Small Business |
| companies, cuts will likely come first in any | | | | Administration loan programs to favor entrepreneurs. |