Despite the growth of new communications services and product offerings, the major industry suppliers and distributors are planning to do more with fewer people. Yesterday's announcement from Verizon Communications that it will lay off 8,000 employees from its wireline business should not have been a major surprise to anyone, in consideration of the growth of wireless services at the expense of traditional wireline services. Even in stronger economic times, carrier wireline business was declining. The Verizon release brings to mind other significant layoff announcements in the communications industry from the past two quarters or so:* Microsoft announced plans to cut 5,000 jobs (January);
* Cisco laid off between 600 and 700 San Jose headquarter workers (July);
* Nortel announced in February it would cut its workforce by 3,200, in addition to 1,800 layoffs announced last year;
* Alcatel-Lucent announced in December 2008 that they would be cutting 1,000 managerial positions and 5,000 contracted positions from their global workforce;
* Motorola laid off 2,800 workers in April, adding to the previous total of 7,000 beginning November, 2008;
* Qwest announced layoffs of 1,700 (February);
* AT&T announced early December, 2008 that it would cut 12,000 workers;
* Ericsson says it plans to lay off 5,000 as a cost-cutting measure (January);
* Sony Ericsson cut 2,000 employees (April).
I have more than a few friends and acquaintances who have been downsizing victims (and I expect to have more as the year goes on), that are currently finding it difficult to attain a new position. Several have forwarded me their resume should I know of or run across an opportunity. Any supplier interested in speaking with one of my friends who is highly experienced and knowledgeable regarding enterprise communications should email me.
One of the metrics used to determine and assess market success is revenues per employee as compared with like competitors. When revenues, in times as these, decline precipitously it is usually mandatory that employee levels follow, especially when productivity measurments need to remain stable. The significant decline in customer demand for enterprise communications systems the past year due to ambient economic conditions has also motivated companies to think lean and cut any fat they may have accumulated when times were good for several years; not all layoffs are undeserved from the perspective of the executive floor.
When I started work at AT&T headquarters almost 30 years ago, the assumption for many of my co-workers at the large Basking Ridge, NJ, facility was that they had lifetime job security as long as they didn't kill anyone. After divestiture the first major layoff announcements at AT&T and the seven BOCs were shocking, similar to the first Cisco layoffs several years ago or this year's Microsoft cuts. Reality had set in, it was tough out there and declining revenues and profits forced the hand of management. The communications industry, once dominated by national and localized monopolies like AT&T and GTE, could always increase rate tariffs to cover operating expenses, but since the era of open competition everything changed, and not always for the betterment of the employees. Competition meant more opportunities for the top employees: good PBX salepersons could easily make six-figure incomes more than 30 years ago working for an interconnect dealer, at a time when homes in the suburbs were priced comparable to a luxury automobile today. The wireless boom of the last 20 years has also been a bonanza for many employed in the industry. All good things always come to an end, however, and right now we are at one of the nadirs for the industry as a whole.
The good thing about bad times is that they are followed by good times. When the recession ends and employment rates rise, demand for enterprise communications systems and services will again increase and market leaders will be in hiring mode to support growth. Perhaps latent demand for Unified Communications (UC) offerings will be a hiring driver. Microsoft, if its OCS plans succeed, will certainly be looking for experienced enterprise communicatgions managers. And if Google ever hopes to crash the market they, too, will need experienced staff. In the meantime, the growing ranks of the unemployed can either wait it out or seek employment in another horizontal or vertical market sector. I am sure more than a few have joined the consultancy industry, because the barriers are low and almost anyone can be one (as I can personally attest).
