News

The deep financial crises that the world economy is suffering will also have repercussions on the workers in the IT sector, as one may have expected.



This week, two major companies namely Yahoo! and Texas Instruments, announced hundreds of layoffs as a consequence of the slowdown that is now hurting the real economy as well.



Texas Instruments (TI), a US chips maker for cellphones, stated it will cut 650 jobs, out of its 30’000 employees, in six different countries to save money because “orders were slowing down rapidly” reported the New York Times. The company said its sales are expected to reach between $2.83 billion to $3.07 billion in the fourth quarter while analysts predicted around $3.3 billion.



In terms of benefit in the third quarter, TI earned “only” $563 million compared to $776 million during the same period in 2007 and revenue declined 8% to $3.39 billion. The redundancies would save $200 million per year and will be concentrated in one unit that supplies baseband processors to smaller manufacturers. This unit, which might be sold to one of TI’s major competitor Motorola in a near future, will suffer 350 job losses.



As for Yahoo! the situation is somehow similar. The company declared it will cut at least 10% of its 15’000 workers because “reduced marketing budgets had taken a bite out of its online advertising business”. In fact, net income for the quarter fell to $54 million from $151 million last year but revenue rose 1% to $1.79 billion.



These layoffs come after Yahoo’s unsuccessful moves to partner with AOL and Google. Yahoo might cut some of its services together but refused to say which ones. Yahoo’s co founder, Mr. Yang, declared the aim is to save $400 million before the end of the year and make the organization more efficient.



But analysts said the company “has been lurching from crisis to crisis” since Mr. Yang became chief executive in 2007. “Unless the layoffs can lead to more rapid, more creative product introductions or more competitive wins, they won’t move the needle” one analyst said.



Yahoo! who already cut 1000 jobs last year is loosing market shares and the cuts won’t certainly address the real problems the company faces. Many investors think Yahoo! made a major mistake by refusing Microsoft buyout bid last year and go on selling the action which continues loosing value.



UNI is disappointed that the mistakes of bankers are paid by IT workers, among others, and firmly condemn massive layoffs strategies by companies that are still making profit and are experiencing organisational problems that certainly can’t be solved by reducing the major asset of a firm in today’s highly competitive business environment: its workforce.