While much of the focus in the current news cycle seems to be on celebrity top executives and the minutia of selecting and deselecting them, there is an underlying trend receiving far less notice: layoffs of ordinary workers at tech companies.
The problem stems from the long-term malaise of the x86/Windows ecosystem, which has been largely upended by the iOS/Android/ARM ecosystem in the fast-growing high-mobility space. Yes, hundreds of millions of PCs will continue to be sold year in and year out for the next decade or even longer.
Perhaps Jon Peddie nailed it best when he said, “A PC is a truck, and sometimes you need a truck.” But all the growth is in high mobility, and PC companies are losing jobs.
Some of the personnel shedding is structural. For weeks, rumors of massive layoffs had been swirling around Dell, which recently went private. A couple of days ago, a company spokesperson came out and said, yes, there will be some layoffs, but far fewer than rumors had indicated, and the company will be hiring in high-growth areas. Dell has a lot of discretion about how it manages profit growth, now that it is no longer under the glare of Wall Street’s scrutiny.
Hewlett-Packard, the former number-one PC maker, is working its way through cuts enumerated in tens of thousands. IBM, with no exposure to PCs but a vulnerability to a hardware slowdown in an increasingly cloud-oriented market, is quietly trimming a few thousand people (and selling its x86 server business to Lenovo). Other enterprise hardware companies sloughing jobs include Cisco, EMC, and Juniper.
Even in the high-mobility space, some of the weaker players are downsizing. In this part of the landscape, layoffs are driven not by a slowing market, but by brutal competition.
Motorola Mobility was bleeding money and letting thousands of people go, even as Google was trying to get out from under it. Assuming Lenovo’s acquisition of Moto goes through, expect a bit more reduction before it stabilizes. HTC misstepped several times on the product front in the past couple of years, and that was all it took to begin the “streamlining” and “optimizing” with respect to workforce size.
BlackBerry pretty much missed the boat entirely as smartphones took off. The company hemorrhaged money, leading to thousands of layoffs.
An exhaustive accounting of the details can be found in CNet’s “Layoffs” section.
What becomes apparent when one takes all these individual company decisions together is that important sectors of tech, which were previously fonts of job growth, are no longer the gold rush that they once were. Yes, some companies are thriving, growing, and hiring. Apple and Samsung, the two biggest winners in high mobility, are stable. And Google, Facebook, Twitter, and others participating in the newer (and higher growth) markets, are doing fine.
But the rust belt of the industry, hardware manufacturing, is a tough place to be. And it’s hard to see that situation changing in the foreseeable future.