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Fired: Seven large lay-offs by high tech companies

Hewlett-Packard’s announcement that it would be laying-off 27,000 of its employees in a massive restructuring plan, marks a new low for the beleaguered company that recently posted a significant 31 per cent drop in profits. However, HP (NYSE: HPQ) is not the first tech company (and perhaps won’t be the last either) that took a hack-and-slash approach to its workforce when facing economic uncertainty.

Here are seven major instances in the tech industry of employees facing the brunt for their employer’s misfortunes.

1. IBM (1993): 60,000 jobs

Yes, you read that right. In July 1993, IBM announced that it would lay off about 60,000 of its employees, a number of jobs that most companies won’t be able to create in their entire lives. Out of that number, 35,000 were laid-off directly while 25,000 were offered early retirement, a move, the company claimed, cut annual costs by $4 billion.

The decision was made by Louis Gerstner, IBM’s then Chairman who had been brought in to revive the fortunes of the company that had just posted quarterly losses of $40 million ($64 million by today’s standards). To his credit, he did manage that and is widely acknowledged to have saved IBM from failing as a company.

2. AT&T (1996): 40,000 jobs

The American telecom behemoth announced in January 1996 that it would let go off 40,000 employees over the course of three years. The lay-offs were part of a restructuring plan that also saw AT&T spin off Lucent and NCR into independent companies.

AT&T was widely criticized by both American politicians and the media since its then CEO Robert Allen was being paid a whopping $3.6 million salary that was also linked to the performance of the company’s shares, the value of which jumped by 10% following the announcement of the job cuts.

3. HP (2008): 24,600 jobs

Yes, HP has done it before. For a company that’s often touted as one of the best employers to work for, HP sure does fire people a lot. In 2008, after acquiring EDS, HP announced that it would lay-off 24,600 employees, over three years, in an effort to “streamline” the company.

Then HP CEO, Mark Hurd, who later resigned under controversy in 2010, said that the process would save the company $1.8 billion annually. In retrospect, and in context of the recent announcement of lay-offs by CEO Meg Whitman, it certainly doesn’t appear to have done the job (no pun intended).

4. Sony (2012): 10,000 jobs

Sony has definitely seen better days. The consumer electronics giant had always been a profitable concern, posting a profit of $3.84 billion as recently as 2008, but is now being hit hard by, among other things, a television manufacturing division that has seen losses for eight years.

After announcing a projected loss of $6.4 billion for the fiscal year, Kazuo Hirai, the new CEO revealed the “One Sony” reorganization plan that would see 10,000 employees lose their jobs over two years. After four straight years of losses, Sony hopes to see an operating profit next year.

5. Nokia-Siemens (2011): 17,000 jobs

When Nokia announced its tie-up with Siemens Communications in 2006, the outlook for the new enterprise was optimistic. However, after facing stiff competition globally in the network infrastructure segment, Nokia-Siemens has struggled to become profitable, posting a loss of about $380 million in 2011.

In order to streamline its operations and shift focus on mobile broadband networks, Nokia-Siemens announced in November 2011 that it would reduce its 74,000 strong workforce by 17,000 people, including 2,000 in India.


6. Sun Microsystems (2008): 6,000 jobs

Sun, known for its servers and workstations and developing Java, declared in November 2008, that it would be laying off close to 6,000 employees. The then Sun CEO Jonathan Schwartz blamed the economic slowdown and operational inefficiencies and hoped that the move would save about $800 million annually.

However, by early 2010, Sun had been bought out by Oracle and 1,000 more layoffs were announced, although that was offset by the 2,000 new hires Oracle announced for Sun at the same time.

7. Cisco Systems (2011): 6,500 jobs

By the time 2011 rolled in, Cisco found that it had its figurative fingers in too many figurative pies. In a process of streamlining operations and getting out of markets it didn’t find profitable, Cisco shut down its Flip lineup of consumer video recorders that it had acquired in 2009. CEO John Chambers promised employees that the company would narrow its focus and reorganized its management structure, leading to a loss of 6,500 jobs.

Eventually, Cisco’s 6,500 layoffs turned out to be one of the highest for an American tech company for the entire year.