Samsung recently warned employees at its South Korea headquarters that the company will face stiff competition amid a weak economy this year. “The global economy’s low-growth trend will continue and uncertainty surrounding the business environment won’t be easily removed,” Samsung Chairman Lee Kun Hee told his employees according to Bloomerg. The company had a solid 2011, when it sold more than 300 million cell phones for the first time ever. Analysts are also worried about the situation; Park Hyun, an analyst with Tong Yang Securities Inc., said Samsung’s performance is uncertain for 2012. “Potential demand may be there, but whether it will materialize totally depends on the macroeconomic situation,” Hyun explained. Tech isn’t the only industry that’s affected by the economy in South Korea — auto makers are also bracing themselves. “We should make our corporate culture more open, flexible and innovative.” Chung Mong Koo, chairman of Hyundai, also said that he believes the auto industry will also slow this year.

Read

Sony reported its fiscal first quarter results on Thursday and recorded a net loss of 15.5 billion Yen ($198.7 million). The company attributed the loss to the earthquake that struck off the coast of Japan in March, as well as a “stagnate” economy in the United States and Europe. Sony’s operating profits were 27.5 billion Yen ($330 million), down from the 67.02 billion Yen ($862) it reported during the same quarter last year. Operating revenue was 1.49 trillion Yen ($19.1 billion), down 10% from the 1.66 trillion ($21.3 billion) in revenue Sony reported in the first fiscal quarter of 2011. “We think we can be profitable at the current exchange rate levels,” Sony’s chief financial officer Masaru Kato said during a recent news conference. “We had almost no negative impact from the dollar, but the euro is still an issue for us.” Kato said that “TVs are one of the only remaining issues,” for the company and noted that Sony expects to sell 22 million televisions this year, down from the original projection of 27 million units. Kato said Sony’s supply chain was hit hard by the earthquake and impacted the company’s sales during the first quarter but that the supply channels have already bounced back.

Qualcomm said it expects to ship between 120 million and 125 million chips during the quarter ending in September, a figure that is lower than the 130 million units MLM Partners LLC analyst Tero Kuittinen expected the company to move. The lower projection hit Qualcomm in late trading on Tuesday when its stock price fell 3.8%. Qualcomm blamed the lower than expected forecast on a weak European economy and said that consumers there aren’t buying new phones as quickly. “Chip units for autumn are light,” Qualcomm chief financial officer Bill Keitel said during a conference call. “The blame likely lies in Europe. European inventory correction now seems to be a fact instead of a theory. We reduced a bit our forecast for how many new CDMA-based units would sell into Europe. The situation demands that we still be cautious.” The company also noted that it hopes to begin working with manufacturers to build its Snapdragon processor into tablets. That chip is mostly used in smartphones now and manufacturers such as Samsung and Motorola have instead used NVIDIA’s dual-core Tegra 2 chip to power Android tablets.

Read

As Finnish cell phone giant Nokia continues to cut costs in an effort to combat declining demand, the company recently told Reuters it would shed an additional 490 jobs in the near future. 170 employees from Nokia’s logistics, production management and production support divisions will be released and the company will extend its Voluntary Resignation Package to 320 workers at its Salo facility. Nokia had already implemented a temporary layoff schedule at its plant in Salo, but apparently the measure wasn’t as effective as it had hoped. So far this year, Nokia has cut approximately 4,000 jobs as it pushes to reduce annual expenses by nearly $1 billion.

Thanks, Tyrone

Read

The Rockefeller Institute, a research group tied to SUNY, said that sales taxes took a 6.1 percent dive in Q4 of 2008 and Q1 of this year was even worse. Given the current state of the economy of course, this is hardly a surprise. Beyond the obvious reasoning behind the decline — people are losing jobs, making less money and spending less money — the drop may be bad news on another front as it could finally spell the end for the free rides afforded by online shopping. The idea of requiring online retailers to collect sales tax on out-of-state sales has been tossed around over and over again but according to the New York Post, this time around it might just stick. A bill is expected to go before congress as soon as this week that would require online retailers such as Amazon and Overstock, and even the online auction house eBay to collect sales tax on behalf of the state to which items are delivered. This spells certain aggravation for consumers who enjoy saving cash by ordering online and even more so for Internet retailers who will have to implement the new policy.

In New York State where an online sales tax bill was passed last Summer, Web retailers are already in the midst of fighting the new policy. New York’s law now requires any online retailer that advertises on New York-based web sites to collect sales tax when shipping to New York. Amazon and Overstock have both pulled all advertising from websites based in New York in protest.

Read

Sony Ericsson announced today that Najmi Jarwala has resigned from his position as President of Sony Ericsson USA and Head of Region North America (US and Canada). Mr. Jarwala will be leaving his position at the end of March in order to “pursue other career opportunities”. While SE seeks out a replacement, the dual role will be filled by Anders Runevad, currently the Executive Vice President of Sony Ericsson and Head of Global Sales & Marketing. With Sony Ericsson seemingly sinking faster than a lead weight, we can’t blame Mr. Jarwala for jumping ship while he can — though we would imagine he didn’t make the decision to leave entirely by himself.

Read

The heat is on and Nokia appears to be feeling the burn as much as the next company as it has just announced a new round of cost-cutting measures that will go into effect next week. The Finnish handset manufacturer turned Internet Company revealed today that it will be introducing a new Voluntary Resignation Package that invites employees to voluntarily and amicably part ways with the company. This of course is in addition to the recent news of massive temporary layoffs at its production plant in Salo. A sound word byte from Hallstein Moerk, Nokia’s Head of Human Resources:

The response from employees and employee representatives in proposing ideas to help reduce personnel-related costs has been encouraging. We have considered these and are now announcing voluntary initiatives that could contribute to our efforts to adjust our cost base to the current market environment. If successful, the voluntary initiatives will lessen the need for involuntary redundancies.

Nokia will put the package into effect beginning March 1st and it will remain on the table until 1,000 employees have taken Nokia up on its offer. In addition, Nokia is encouraging its staff to request unpaid leave of up to one month and will happily grant such requests provided “business continuity is not jeopardized”. Sad news indeed, but we’re certainly hoping enough people can take advantage of the VRP and land gigs elsewhere so that Nokia doesn’t have to resort to any more “involuntary redundancies”.

Read

As MWC draws closer mobile fans around the world wait in anticipation as mobile companies prepare some of their biggest announcements of the year. Leading up to MWC, news coming from manufacturers is historically positive – a taste of things to come in Barcelona. In this economic climate however, mobile companies find themselves unable to wait until this sacred time has passed and we are still seeing bad news come down from every corner of the industry. Today’s news comes from our friends in Finland as Nokia discusses the coming year with two key phrases: scale down and reduced market demand. Juha Putkiranta of Nokia:

With these plans, we aim to scale down Salo production to reflect reduced market demand, while operations in the factory continue uninterrupted.

Nokia plans to cut handset production and layoff the entire staff at its Salo plant (2,500 workers) on a temporary rotational basis. In other words, the plant will remain operational but only 20 to 30 percent of its staff will be on hand at any given time. Following Nokia’s closure of its German manufacturing plant, Salo is the last major handset plant in Western Europe and had been used to produce some of Nokia’s higher-end handsets, the bulk of which will now likely be moved to foreign plants. All of these moves of course, are part of an effort to shave $905 million from its operating expenses this year as many project Nokia’s shipments and sales to continue to decline. Less market demand, declining numbers and more competition are never a good trio for any market leader but we’re hoping Nokia has some tricks up its sleeve for 2H 2009 and beyond.

Read

Despite solid Q4 2008 earnings, Verizon Wireless is apparently not layoff-proof in this struggling economy but then no company is. Rumor has it that Verizon is in the process of an unannounced work force reduction that began yesterday, February 9th. The rumored layoffs will continue through the end of the month and will affect an unknown number of employees from management level down. As always is the case, low performing employees and those facing disciplinary action are at the highest risk of losing their jobs. This is certainly a difficult economic time and even successful companies may be prompted to let employees in an effort to minimize the impact of the downturn. We hope that this rumor is not as dire as it seems but if it does pan out our condolences are certainly with all who are affected.

Thanks, M!

UPDATE: Here’s what we think happened after talking with some people in the know… it seems as if this is concerning employees associated with Circuit City (estimated at around 240). Since they are Verizon Wireless employees, Verizon is said to have tried and relocated as many of them as possible to other stores, etc. We’re told that the employees that were let go got severances packages including outplacement services to help them find other employment.

Read

First things first: 1.9 million activations is nothing to scoff at. It’s a huge number, and represents AT&T and Apple’s unquestionable success in the smartphone arena. Including the 4th Quarter results, the company can claim 4.3 million total iPhone activations since the introduction of the iPhone 3G, an impressive number by anyone’s standards and a certain earmark of Apple and AT&T’s continuing dominance in the consumer market. The company also revealed, somewhat cryptically, that iPhone users generate “higher revenue” and “lower churn rates”. Good, right? Right. On the other hand, the company also reported that its general earnings were down to $2.4 billion from $3.1 billion just one year prior. The drop is completely understandable, however, given the general recession and the fact that the company seems to be fending off any sort of massive disruption. On another, slightly more comical note, AT&T blamed some of its earnings drop on its “iPhone 3G Initiative” designed to build out coverage and tower infrastructure to cope with the increased network demands. We’re not sure about you, but it doesn’t seem like the aforementioned initiative has hit anywhere close to our home towers…

Read

…and over 35,000 folks prepare to start searching for a new job. So sad. This latest bit of bad news comes after Circuit City’s lengthy, and apparently fruitless, search for a buyer. The company has been trying to sell its assets for quite some time now. It seems, however, that faced with a ticking clock and an utter lack of interest from outside parties Circuit City has made an agreement with a liquidation firm to get rid of all of its material assets and close shop. The company filed for bankruptcy this morning in Richmond, Virginia. While there will certainly be a bit of a “all items must go” sale frenzy, this is ultimately very bad news for the economy, electronics industry, and the 10′s of thousands of employees that now find themselves without a job. Sadly, it also begs the following question: Who will be the next to fall?

Read

Things aren’t looking too hot for Sony CEO Howard Stringer. Back in October his company predicted that it would end its current fiscal year with an operating profit of $2.2-billion but a Japanese newspaper is reporting Sony is well on track for a loss of at least $1.1 billion. So what happened to Sony? For starters the Japanese economy, the second largest in the world, was one of hardest hit victims of the credit crunch. Japan’s largest stock market index, the Nikkei 225, ended 2008 down 50% from where it was back in June. Add to this the ongoing fear of deflation due to the rapidly strengthening Yen, soaring national debt, low consumer confidence and very bleak picture is painted of an economy that just doesn’t have the cash to be buying high-end consumer electronics. And of course it doesn’t help that every single nation in the Western world is having severe economic troubles of its own. The only positive thing going for Sony (if you can even call if that) is that its Q4 ends in March, meaning it has a couple more months to drastically cut costs. If Sony don’t make some fairly major moves, its losses on the year could rise to as much as $2-billion. Guess that means the $399 price tag on the PS3 isn’t going to come down any time soon.

Read

The philosophy has to be that a company never went out of business because it took too many costs out. A company goes out of business because you didn’t take enough costs out. As you take costs out, you can always overshoot it. In fact, if we overshoot it, you know you did a good job because the pain is so loud, and you can always go back in and add something. We are going to be in the mode of overshooting, so the number will be a big number.

Brust went on to state that Sprint execs would be presenting a plan to the board sometime next month so we can expect layoffs to begin shortly thereafter. Not that is has been any mystery that Sprint’s vitals are declining at frighteningly rapid speeds, but we were surprised to see Burst as vocal as he was. He was even quoted at one point as saying, “We’ve had a lot of trouble with the brands since the [Sprint-Nextel] merger because of dropped calls and bad customer service. As we spend more money on recapturing subscribers, we can get the brand back where it belongs… You’ll see a more aggressive advertising campaign.” Admitting to network issues and bad customer service? How uncharacteristic of a carrier is that? Perhaps it’s a sign of the sheer desperation within the c-suite at Sprint. Whatever the case may be, more rough times are undoubtedly ahead for the carrier and its employees over the coming months and beyond.

Read

1. The number currently remains at 1,500, although given the current economic environment, several sources at Yahoo expect the eventual numbers to add up to be more that that, up to 2,000.
2. The layoffs are mostly across the board. But expect general, human resources and finance to take a bigger hit, since the expenses are cost-based and most of their costs are staff.
3. Employees targeted will be told on Wednesday morning with a “normal separation period,” said a source close to the situation, which means they will be out within a few hours on the same day.
4. Yahoo execs, sources say, are not expecting any serious problems, i.e. extremely upset employees, because these layoffs have been long anticipated. But there will be security present at its Sunnyvale HQ and elsewhere, as there always is with most big layoffs at any company.
5. Most employees do not know if they will be let go yet, nor has management in charge of the cuts made that public. That’s because whole projects might be eliminated, sources said, and the cuts might present yet another chance to restructure more.
6. No, Yang is not leaving as CEO quite yet, although this week is a perfect time to name a new CEO and get the focus off of the bad news at Yahoo.

Though the layoffs were expected, prior knowledge does not lessen the blow; especially during the holiday season. Our sympathies and best wishes go out to all Yahoo employees who will be ringing in the New Year while looking for a new job.

Read

In a press release this morning, AT&T announced that it plans to cut 4% of its workforce, amounting to approximately 12,000 jobs, beginning this month. While this news might not come as a surprise – it’s hard to be surprised by layoff announcements these days – it is a move that will impact a tremendous amount of people. The layoffs are slated to begin this month and will continue throughout 2009. AT&T is allocating $600 million as severance for those affected, but that will hardly change the fact that they will be in competition with the hundreds of thousands of others who have been laid off during this global economic crisis. AT&T has stated that while it is reducing manpower in many areas it will continue to add jobs in certain divisions such as wireless, video and broadband. As always, our sympathy and best wishes go out to those affected by this announcement.

Read