More layoffs to hit Silicon Valley

November 20, 2008 6:36:00 PM PST
Bay Area layoffs in the year ahead will increase. Four out of 10 CEO's surveyed by the Bay Area Council say they plan to trim staff and technology companies in Silicon Valley are not immune.

Silicon Valley joins retailers and many other businesses in an economic downturn that shows no signs of a turnaround. However, the picture isn't dire... yet.

"Most of the layoffs planned are between the one and 10 percent range. That's a lot less than we saw in the dot-com bust," said John Grubb, from the Bay Area Council.

For some companies, the numbers can be large. Applied Materials is a major supplier to the semiconductor industry and already announced a 12 percent cutback, which translates into 1,800 layoffs.

"It's really about streamlining the business and trying to make the business stronger so when we come out of the downturn, we're prepared to go," said David Miller, from Applied Materials.

Bill Nguyen has been involved in a series of Silicon Valley start-ups; his most recent is the music website lala.com. He is critical of CEOs who use layoffs as a quick fix before looking at other cost-saving measures.

"I'm sure companies have to do it, but it's a failure of leadership. I don't know how you cannot lay off people and not take personal responsibility for doing it. I don't know how many times CEOs fire themselves. I don't think it happens very often. Maybe that's the first fire that should happen. But I think these are failures of leadership," said Bill Nguyen, lala.com CEO.

The fear of layoffs can have a far-reaching impact on morale and productivity, extending even to family and friends.

"Constantly seeing people losing their jobs or at least worried about their jobs," said Kelly Copland, a San Francisco resident.

Those involved in executing layoffs say it's a very deliberative process.

"There are a lot of considerations given. It's behind the scenes. It's a lot of work to try to be as fair as possible," said Rosette Weiss, a former human resources manager.

"It's never an easy thing to do. It's the toughest thing any of our managers will ever do," said Miller.

Bay Area CEOs say the spectra of layoffs could last until 2010, the earliest they foresee economic conditions improving.


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