As Ericsson cuts 4,000 jobs, is a tech recession biting?

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Ericsson is cutting 4,000 jobs this year. Yahoo! is cutting around 1,400 jobs globally, about a 20% of its workforce. Is it time to get your pith helmet on and knuckle down for a tech recession? Well, as the estate agents like to say, there are hot spots – and then there are cold spots. The cold spots are in traditional telecoms, like Ericsson, which is a sector gradually being commoditised. They are also in places like Yahoo!, which appears to have forgotten what it is for, being sandwiched between Microsoft, Google and now new ‘platform’ players like Facebook (yes, whether or not Facebook survives, it’s model as application platform is here to stay).

Meanwhile over in the US, if you happen to be a computer science graduate, you are being fought over by tech giants and startups alike. Nice for them, but in Europe jobs from those companies are rare unless you happen to major in sales and marketing, or you can get past the 15 interviews (as with Google).

For as the recent launch of Moli, a new UK/US/Ireland social network for freelancers and small businesses attests, US companies tend to keep their big development offices back… in the US. A case in point, Moli did not, it turned out, have 55 people in Dublin’s Digital Hub area, but more like five (if that) in a sales and marketing office. The same is true of Facebook, which will have a sales office in London, and LinkedIn, natch.

The news is not all doom and gloom of course. In the UK there is already a skills crisis in tech, which should be useful to those with the skills already, but then there is the competition from Eastern European outsourcing. Like I said. It’s hot and cold.

  • Alberto Nardelli

    I think the issues affecting Ericsson and Yahoo!, beyond a reflection of an economic recession, are a consequence of strategic decay, which is hitting key sectors, not only tech – think record labels, telcos, car industry, media (NYT drop in shares), banks etc. and the fact that these markets are pillars in most economies, and money and investment continues to be pumped into these models.

    The issue is deep in their business models, or as Umair Haque over at BubbleGen would say, it’s in their DNA, and this is at the heart of the current economic crisis, well beyond credit issues.

    It’s not a surprise that companies like Google (despite yesterday’s Q results), that innovate, are less in a crisis.
    I think Bill Gates really nailed down the true issues at Davos:

  • jamescoops

    yeah is highly recommended

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