recess

As the recession takes its toll, Motorola announced Wednesday that it is cutting compensation and benefits packages for its employees, including top executives.

Co-CEO Greg Brown will forgo a 2008 cash bonus earned under his incentive plan, while co-CEO Sanjay Jha will forfeit his cash bonus at a similar level as Brown's and take the remainder of his cash bonus in restricted stock.

Beginning in the new year, Motorola plans to suspend its matching 401(k) contributions, leaving employees to be the sole contributors to their 401(k) plans.

And a number of Motorola employees will face a salary … Read more

Editor's note: This is part of a series of stories about the recession's effect on the tech industry.

Note: This article has been corrected to reflect that Ultimate Electronics is not going out of business, as previously stated.

When Circuit City management told employees to arrive at their respective stores one hour before opening in early November, everyone knew something was up.

Except T.K. Campo.

The 21-year-old wasn't able to go in early, and arrived at his job stocking shelves at the Scottsdale, Ariz., store to find his fellow employees just standing around, looking generally shocked and upset--and, conspicuously, not working.

That's when he got the news. "They told me we were closing down. From then, there was this giant, somber mood throughout the whole store. Everyone was going to lose their jobs, and people were really upset. At least one person was crying."

Campo's store was one of the 155 stores that Circuit City announced it would be closing to get the struggling retailer back into good financial health. Overall, 17 percent of the workforce was to be cut. Just a week later, the chain filed for Chapter 11 bankruptcy.

The recession has claimed hundreds of thousands of jobs here in the U.S., but unemployment is having a secondary effect on retailers. It has killed consumer confidence, and hawkers of expensive gadgets like Circuit City, and Tweeter, have been hit hard.

As disappointing as it was for Campo to lose a job that he liked, this 21-year-old has more responsibilities than most of his peers working retail. He's a single father who recently won joint custody of his 2-year-old son. Campo is also putting himself through school, studying math with hopes of becoming a high school calculus teacher.

But his priority right now is making his child support payments.

"I can always take little break from school, but (working is) always to provide more for my son," he said during a telephone interview. "At Circuit City, I would have been able to move up, and eventually get more money. But that opportunity's kind of gone now."

Campo has been working at the Scottsdale store since May--he'd been laid off from his previous job as a line cook after he went on disability leave with a broken arm. But he took a liking to his work stocking shelves at Circuit City, updating prices, and interacting with customers. But most of all, he enjoyed his 40-some co-workers.

"I befriended just about everyone that works there. For the most part, everyone that's left is a tight group."

Over the past month the group has found more ways to bond since the news of their store getting shut down. Knowing that there is a definite end date to their employment, the store "became this relaxed environment," Campo said. If they can't help a customer, nobody stresses out. Some phones go unanswered, and just "general messing around" ensues.

But they know they still have work to do.

The liquidators--the company that bought up the store's debt and inventory--came in a few days after the announcement, put up store closing signs, and changed all prices to the MSRP (manufacturer's suggested retail price), then marked them down a bit more.

Once the signs went up, a frenzy of bargain hunters descended on the store. But not everyone liked what they saw.

"Some (shoppers) got rude, some got really nasty," Campo recalled. "Some people would come in and tell us we deserve to lose our jobs because they're not happy with our prices, and unhappy we couldn't alter prices or return things anymore that had been purchased after liquidation. Some were unsure what to do if they had purchased (extended) warranties. I don't know...it seemed like some people enjoyed being unpleasant to us. There wasn't a lot more we could do for people." … Read more

Editor's note: This is part of a series of stories about the recession's effect on the tech industry.

After nine months of searching for work, Ben Klausner thought he'd finally caught a break when he landed a contract gig in September doing security work for Microsoft's cloud computing project.

Just a month after he started, though, he learned his contract was ending. Now Klausner, a 55-year-old former IBM worker finds himself again out of work. And the prospects for employment look even dimmer than they were before the Microsoft job.

"It was frustrating," he … Read more

Editor's note: This is part of a series of stories about the recession's effect on the tech industry.

Last month, McAfee cybercrime strategist Pamela Warren sat down with a senior executive at a Sydney bank to discuss the risks to the corporate network from workers using social networking.

After going over the trade-offs associated with allowing insiders to use social networks at work, his team confirmed that they would use data leak prevention technology to monitor the network traffic--balancing the desire to benefit from such new technologies while ensuring company secrets remain protected.

Warren had a similar meeting … Read more

Updated at 7:41 a.m. PT to include reductions in temporary and contract workers.

Sony plans to lay off 8,000 workers in its electronics business worldwide as part of a broader plan to trim expenses and tighten its focus in a difficult financial climate, the company said Tuesday.

The Japanese electronics and media giant, which currently has a full-time global workforce of 160,000, joins a long list of tech companies that have cut jobs and scaled back production.

The company will also eliminate a number of contract workers and temporary employees, which would total an additional 8,… Read more

Barack Obama won the U.S. presidency for one very good reason: he presented himself as a credible leader. McCain offered little in the way of hope that he had the intelligence or risk profile to make real changes to the way this country works. This isn't a slap at conservative principles (as a conservative, I hardly feel inclined to do that). It's a slap at conservative leadership.

That's politics, but what about business? Reading through The Wall Street Journal and the Financial Times today, I almost became physically ill reading non-stop headlines that evidence hand-wringing and … Read more

Back when I was a public company auditor (yes, you read that correctly), I quickly realized after discussing business with top-level executives that few were prepared to meet the challenges that (at that time) seemed unlikely to affect us again. They believed that the economy would continue its rapid expansion, consumer spending would rise by staggering amounts each year, and we would all profit greatly.

But over the past few months, the walls have started closing in and we find ourselves in a recession. Notice I didn't say "historic recession" or "calamitous recession", but simply, "recession"? It's because a recession, by its very nature, is open to interpretation. There is absolutely no proof to show that this recession will be as bad as the Great Depression even though some news stories like to throw that in. Even though times are tough and uncertainty in the market is rampant, companies need to remember that a recession is only as bad as they make it out to be.

The Consumer Electronics Association announced Thursday that it has revised electronics revenue forecasts down for next year after witnessing sales that were on par with last year. Growth is expected to be 0.1 percent--3.6 percentage points lower than it originally forecast.

I'm sure that figure spreads fear through the industry and companies will look at an expected drop in sales as an event that could destroy the market. But instead of fearing what may come, companies should capitalize on this time and allow others to fear for the worst, while they use that as an opportunity.… Read more

Editor's note: This is part of a series of stories about the recession's effect on the tech industry.

With the calendar winding down, the hours get hardest when Andy Erickson and his wife, Andrea, are forced to take out their checkbook and do the math.

"We see the finish line in December before we have to dive into personal savings," says the unemployed 39-year-old father of three. "It can turn into a tense talk between us for a couple of hours."

For the last 15 years, Erickson had steady work as an IT consultant, … Read more

Facebook employees hoping to cash out some stock options received an unpleasant early Christmas present this week, courtesy of the economic downturn.

In August, Facebook began considering ways to let current employees unload a portion of their shares that had vested by this fall.

But on Thursday, Facebook Chief Executive Mark Zuckerberg notified employees that the plan was on hold. "I'm writing this note to let you know some bad news," he wrote, according to an excerpt posted on Valleywag.com. "Despite a lot of work, we have not been able to finalize a plan for … Read more