To provide some context, the story notes that, â''Tech companies directly account for about 4 percent of the nationâ''s employment. And globally, companies and governments spend about $1.75 trillion on technology a year, according to Forrester Research. But the industryâ''s importance to the world economy is larger than its size might suggest. Technology has fueled many of the productivity gains of the last two decades. And about half of the capital spending by corporations goes toward technology products, according to Moodyâ''s Economy.com.â''
In the past two weeks, weâ''ve seen Circuit City declare bankruptcy; Best Buy saying that it expects this to be the worst economic environment in the company's 42-year history with sales declining for the year up to 8% instead of its previous forecast of 3% growth the company made just this past September; Sun Microsystems announcing a layoff of 18% of its workforce (about 6,000 employees); Intel saying it expects its fourth quarter sales would move from slow growth to a decline (3% growth to 12% decline); Cisco Systems too saying it expects the last quarter of 2008 sales would move from moderate growth to a decline (7% growth to 10% decline); and Google shares dropping from their peak of $742 to around $310. The story said that even Google has started (for them) some serious belt-tightening.
How the continuing poor economic conditions will affect the H-1B visa debate will be interesting. The incoming administration has said that it still favors an expansion of the program, but following through on this campaign promise may provoke a firestorm of criticism from increasing numbers of out of work IT professionals.
IEEE Spectrum's Associate Editor Sally Adee has more detail of tech companies in trouble here.