13,000 tech jobs disappear in one day

Online video software firm Real yesterday announced that it will cut 7.5 per cent of its employment base, which amounts to around 130 staff.

"The layoffs, in addition to other cost-cutting measures, are part of a budgeting process intended to bring expenses in line with current and prospective economic realities," said Bill Hankes, corporate communications vice president at Real, in a blog posting on the company site.

"While our business has not been affected as much as others, we are not immune to what's going on in the broader economy."

Digital media firm Viacom said in a statement on Thursday that it will reduce its headcount by approximately seven per cent, or 850 positions, and will suspend senior level management salary increases for 2009.

"The changes we are making in our organisation and processes will better position Viacom to navigate the economic slowdown," said chief executive Philippe Dauman.

But the biggest cuts by far came from telecoms giant AT&T, which announced that it will cut roughly 12,000 employees from its ranks. The reduction accounts for some four per cent of the company's staff, and could cost $600m (£407m) in severance expenses.

On the same day, Nokia announced cost-cutting measures and lowered its estimates of fourth-quarter market share of mobile devices, which it said was unlikely to meet its third-quarter share of 38 per cent.

"The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility and decreased availability of credit, " said a Nokia statement.

But the phone company has plans to increase its market share in 2009, including its share in smartphone devices, which analyst firm Gartner said yesterday had reached their weakest year-on-year sales growth since it began tracking the industry.

"The current economic climate is negatively impacting sales of higher-end devices," said Roberta Cozza, principal analyst at Gartner.

"Although leading mobile operators are subsidising more smartphones to reach lower prices, they tie the device to two-year contracts with monthly data plan rates which remain too expensive for the mainstream user."

On Wednesday, Adobe announced it had revised its fourth-quarter 2008 revenue from a target range of $925m to $966m (£634m to £662m) to a lower range of $912m to $915m (£625m to £628m). The software company also announced that it would lay off 600 full-time staff.

And research firms have only deepened the industry uncertainty. One of the leading research authorities on consumer technology, the Consumer Electronics Association (CEA), has revised its projected industry growth for the fourth quarter of 2008 because consumer spending is falling despite the holiday season.

The CEA originally anticipated 3.5 per cent growth for the fourth quarter of 2008 compared with the same period last year, but has now lowered this to 0.1 per cent.

"Although the CEA certainly took price declines and weakness in consumer demand into consideration, the severity and the speed of declines in these unprecedented times caught everyone off guard," said Jason Oxman, senior vice president of industry affairs at the CEA.

Analyst firm IDC has produced its latest report on server market revenue, noting a drop of 3.8 per cent year on year to nearly $4bn (£2.74bn) in the third quarter of 2008. This is the largest decline IDC has registered in the market since the end of 2005.

"Deteriorating economic conditions in Western Europe are having a direct impact on IT spending, and have changed the server market dynamics of the past couple of years," said Nathaniel Martinez, director of European enterprise servers at IDC.

"Purchases are now driven by critical needs and much higher justification for expenditure."

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