John and Thread, re: economy
More layoffs are just occurring at Sun in Silicon Valley. Rather large number, given we're suppose to be in the middle of a recovery, though Sun has a more delayed style in handling their cuts. While others are looking at hiring, Sun is looking at cutting. Their spending wasn't cut early enough, so they are still feeling the pain now. A couple of years ago, I recall being surprised at Sun's spending level while Intel and other financially prudent companies were taking action - cutting expenses first, then labor if it has to be. Most people prefer to see expenses cut first, then labor when it can't be avoided. Sun doesn't work that way - they seem a bit more disorganized on their financials and tend to cut both at the same time, rather than sequentially cutting expenses first then labor, which means their employees can be taken by surprise, unlike other companies that send a strong message to cut expenses so as to minimize labor cuts. Nokia's numbers weren't great, but that's more due to their product line up and Motorola's product-line come back, than the economy.
In other places, am continuing to see signs of a recovering economy. Companies continue to seem more willing to buy technology products. Quite a bit of hiring is now happening here. Even lawyers are now back to doing their trademark disputes, a sign of a continued recovery (during downturns, companies have other important struggles.) Tradeshows are making a come back... Pulver's VoIP tradeshow was packed, they were successful in getting all of their floor space sold, and overflow parking was enabled.
But commodity prices are increasing and General Mills is expected to raise prices on their cereal in the next 4 to 6 weeks. Gas prices are up. Last bust occurred after gas prices rose and consumers ran out of money. This year, consumers still have funds from real estate refinancing, though since it's expected interest rates will rise later this year, real estate developers are saying they expect a change in their industry around Q4-2005.
Am anxious to see what everyone's Q1 numbers will be like. My guess is we'll see more positives than negatives.
Someone on another thread said only 12,000 of the 300,000+ jobs created were full-time. Not sure if that's true. Sounds horrible, if it's true. Though hopefully the job numbers continue to get stronger so consumers don't get nervous (local hiring is getting stronger), otherwise Greenspan has run out of cards to play because there's only so long that he can keep interest rates low before inflation kicks in. As much as I criticize Greenspan for creating a real estate bubble which makes it difficult for Silicon Valley startups to encourage employees to live here, his real estate bubble actually has allowed companies to cut wages or keep them constant so as to minimize layoffs during the downturn, which has drastically helped startups retain their overall headcount which means they were able to move forward aggressively on projects, and thus revenue. But whew, AG certainly cut things a bit close though, and the recovery needs to continue before real estate or inflation hiccup.
Regards,
Amy J |
