The economy continues to be relatively healthy and consumer spending is moving along. The decision by many firms to bring manufacturing back to the United States has aided in continued job growth.
Yet whether their are demands by investors, or the individual company’s market changes overnight, bellwether technology companies continue to make tough corrections that show that the markets that they operate in remain volatile.
One of the more celebrated CEO’s to join Juniper Networks, Shaygan Kheradpir, was faced with that decision last year, when it became apparent that activist investors were convinced that the company was not operating as efficiently as it could with a smaller staff. In agreeing to make the tough cuts, Kheradpir determined that a 6 percent staff reduction was in order. The investors were pleased and the company went on to re-position itself. On the positive side for the company, a 6 percent layoff in an industry where annual turnover can be over 6 percent, many of the layoffs can be handled through attrition.
This year, Qualcomm found itself in a similar position, although the need for a staff reduction was determined internally after there were some market changes regarding its popular Snapdragon chips. In their case, one of their primary customers started using their own chips, triggering an announced 15 percent layoff. For company officials, planning for the downsize certainly involved refactoring how it approaches the production planning process.
For investors, the continued changes normally mean that management is actively making progress in making the company more competitive. For employees, it reinforces the notion that technology careers will continue to contain some twists and turns.