Recession breaks firewalls of Silicon Valley too
By siliconindia   |   Monday, 29 December 2008, 17:14 IST   |    2 Comments
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California: Economic downturn spreads its destructive wings to every nook and corner of the world. News about job cuts and dip in hiring are now being reported from the technology hub of the world, Silicon Valley, the region which was expected to be unaffected by the crisis. Since September, Silicon Valley headquartered technology firms have announced at least 38,000 job cuts. The companies who cut down their workforce included Hewlett-Packard, Yahoo, Adobe Systems, Sun Microsystems and Palm. Goldman Sachs Group foresees that global spending on computers and software would slide eight percent next year in the U.S., Western Europe and Japan. Silicon Valley has about 4,000 fewer jobs currently than this time period last year, with an unemployment rate of seven percent, as per the estimates by Centre for the Continuing Study of the California Economy. Madeline McMenamin, a senior consultant for workforce consulting firm Watson Wyatt Worldwide said that the region will probably feel more pain starting next month. "People are finishing their forecasts and budgets for the next year, and those will reflect continued downsizing," he opined. "While there is not much optimism in Silicon Valley right now, the slowdown will be less severe than the fallout after the dot-com bubble in 2000," said Doug Henton, CEO of Collaborative Economics, a consulting firm in Mountain View, California. He mentioned that about 200,000 jobs disappeared from the region in 2001 and 2002. John Challenger, CEO, Challenger, Gray and Christmas stated, "Last time around, whole swathes of the technology market vaporized. We won't have the same impact this time. This recession is from banks and others dragging technology down with it. And people in the Valley realize how important personal networking is."

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