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Technology firms reel under slower product demand
By siliconindia
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Tuesday, 14 October 2008, 16:25 IST
Bangalore: The presumed 'safe technology sector', smacked by the crushing economy, is being squeezed as the demand for electronic products slows down. In fact, computer and electronic manufacturers who generated 5100 jobs in August completely halted a further expansion of their workforce in September.
According to data released by the Labor Department, around 3,400 jobs were cut by the telecom companies. The squeezing sector are reconsidering the payrolls with employers slashing the payrolls by 159,000 in September, the most in more than five years. Many of these jobs were in manufacturing, construction, retail and financial services. The companies like Google, IBM, Hewlett-Packard which once stood as industry favourites commanding high regards among investors are witnessing sharp declines. While Google slumped by 24 percent during the third quarter, IBM saw a decline by eight percent in the week. Hardware firms like Sun Microsystems, data storage provider EMC and Xerox are at the greatest risk for lowering earnings estimates. "The impact from the credit crunch is translating into significant weakness in the real economy and will likely pressure 2009 (information technology) budgets," Deutsche Bank analyst Chris Whitmore.
However, it's the software vendors who are throwing some light with companies in computer systems design and related services added 8,500 jobs in September, more than the 6,300 added in August. In Whitemore's opinion, it is the companies who have indulged in defensive stocks through long-term contracts can slide through the risky economic slope.
