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All is not well in tech

3K views 81 replies 14 participants last post by  Eclectic12 
#1 ·
I keep hearing analysts talk about how the "tech economy" is so incredibly hot. Maybe... but the jobs are not looking that great.

I have a bunch of friends (all from my old research lab at university) who currently work at Intel. They are hardware engineers and are all now at risk of losing their jobs, since Intel is abandoning domestic chip production and outsourcing to Taiwan. These same folks previously left RIM when that company was falling apart.

And I just received another email from an old industrial connection, a top expert in his field (also hardware engineering). A multinational giant acquired his company, and dissolved his whole team. Everyone let go. So he's asking if I know anyone who is hiring.

Yikes.
 
#2 ·
I wonder if some the Intel jobs would go to Apple, because they will be making their own chips going forward. They probably need a bigger team to design and update them.

Tech has lots of ups and downs, but I think over time, there will be more and more people working in tech. Everybody else is being replaced by automation and AI, it seems.
 
#4 ·
I have no doubt that the corporations are doing well. I'm just wondering about the job situation.

I wonder if some the Intel jobs would go to Apple, because they will be making their own chips going forward. They probably need a bigger team to design and update them.
That's a good point. Some of the jobs could go there.

I've been experiencing these employment swings in this industry ever since I started in the early 2000s. Basically it seems that every 5 years, everyone I know is laid off. For myself as well, it's been a constant boom-bust roller coaster ride. I was still in school at the time, but it started with Nortel in 2000. One moment everyone was happily employed, making tons of income. Before you know it, everyone was laid off. And I've seen it repeat a few times now. For example, RIM (everyone lost their jobs).

There's no question that the "average income" in tech / electrical / computer engineering is pretty good, over the years. I'm sure the situation is the same for oil & gas engineers. The average income is great. The problem is the wild ride along the way!

I compare this to some friends of mine who work in finance and banking. One of my best friends has worked for an insurance giant and has been continuously employed for about 15 years! I've never heard of such a thing in my own industry. It must be nice to have that kind of job stability.
 
#3 ·
AMD, NVIDIA, QCOM seem to be doing ok. I took QCOM off the table at $100 after it doubled in a year and it's jumped to $110 since

INTC seems to be in a slow decline lately. AAPL plans to ditch their chips and they abandoned their mobile chips that competed with QCOM. Maybe they are refocusing but they are slowing losing mobiles/tablets/consumer laptops etc. AMD is putting out better chips at lower prices lately and AAPL plans to build their own

China has been strategically taking control of semiconductors in Asia for some time. If US bans Chinese controlled semiconductors like Huawei this could be huge for AMD
 
#5 ·
INTC seems to be in a slow decline lately. AAPL plans to ditch their chips and they abandoned their mobile chips that competed with QCOM. Maybe they are refocusing but they are slowing losing mobiles/tablets/consumer laptops etc. AMD is putting out better chips at lower prices lately and AAPL plans to build their own
Slow decline?
Revenue increases of >10% is a decline?
sure it's lumpy, but there is definate growth there.
 
#6 ·
I remember having a few friends, during the tech boom and bust of the late 90s and early 00s, who were very well paid tech engineers. They observed in the last 5 years or so that they had made almost as much money from severance packages and vested options, as they did from regular pay, since they were being laid off and then re-hired elsewhere, so often.
 
#8 ·
Tech positions appear to be susceptible to ageism too. I have heard a few anecdotes from software engineers about this. Basically after age 50, there is less interest in their operational capabilities, although some management position may become available.
 
#10 ·
Tech has been changing since I first entered the business in 1980. Downsizing, outsourcing (off shore and near shore) for most of the late 80's through to today. That was so great about the industry. Constant change, dealing with so many different business challenges from process control through to SAP, etc. Quantum computing will be next. One thing that amuses is the new names that the industry comes up for certain functions. Through it's ups and downs in my 30 plus years tech was very good to me from a career, a job satisfaction, and most especially from financial perspective. I met, associated with, and worked with a great number of very smart people. It was where I really learned that working smart was as, and sometimes, more important than working hard.
 
#11 ·
Tech has always been in cycles. I started in tech and moved through the business side. My spouse has always been in high tech in consulting. Over the years, we have been able to gage how hot the market was based on the number of head hunters and firms that would call my spouse. In the 2000's, he would get calls daily for potential contracts or offers, then in the 2008, when there were the recession, he was hardly getting any calls in the month, and actually had to knock on doors for the first time in years. It picked up again a few years ago where he was getting calls monthly, then weekly up until last year. There was nothing during the early months of COVID, but he is starting to get a few calls again. However, they are very targeted to his skill set.

Tech is such a vast industry it really depends on what you specialize in and how relevant your skills are. Firmware is often the first to go as it requires more infrastructure and investment. Software usually has work because there is almost always something to be upgraded or fixed. In terms of stability, we have always known that the pay can be decent but you have to be prepared for a rainy day and keep relevant.

I wouldn't say all isn't well in tech. it's just really changing.
 
#12 ·
Tech has always been in cycles. I started in tech and moved through the business side. My spouse has always been in high tech in consulting. Over the years, we have been able to gage how hot the market was based on the number of head hunters and firms that would call my spouse. In the 2000's, he would get calls daily for potential contracts or offers, then in the 2008, when there were the recession, he was hardly getting any calls in the month, and actually had to knock on doors for the first time in years. It picked up again a few years ago where he was getting calls monthly, then weekly up until last year. There was nothing during the early months of COVID, but he is starting to get a few calls again. However, they are very targeted to his skill set.

Tech is such a vast industry it really depends on what you specialize in and how relevant your skills are. Firmware is often the first to go as it requires more infrastructure and investment. Software usually has work because there is almost always something to be upgraded or fixed. In terms of stability, we have always known that the pay can be decent but you have to be prepared for a rainy day and keep relevant.

I wouldn't say all isn't well in tech. it's just really changing.
Absolutely agree.
 
#14 ·
Not sure why everyone is focused on jobs...had these guys bought stock in some of these companies, (Okay, not thr scams like nortel) they’d probably never have to work at a job. Instead they go back to school for retraining so they can continue on the hamster wheel or jump to The next company which will do the same thing to churn out money for....investors, not employees. Reality check here.

though, some people have to complain to be happy.
 
#16 · (Edited)
Not sure why everyone is focused on jobs...had these guys bought stock in some of these companies, (Okay, not thr scams like nortel) they’d probably never have to work at a job.
Investing heavily in the equity of your employer is a recipe for disaster. Ask the RIM employees who loaded up on RIM stock (-96% drawdown) or just about anybody who worked in the tech sector during the tech bubble & crash.

Or AMD (-96% drawdown) like all those employees in Toronto / Markham
Or NVDA (-86% drawdown) like all those in Toronto (might have changed over the years)
Or BBD.B (-98% drawdown and counting) for the employees spread across Canada
Or NT of course (-100% drawdown)

Should I keep going? Even when these stocks rebound, employees and ex employees hardly ever benefit. People are terminated during the down cycles, at the same time the stocks crash. Nobody can withstand those kinds of drawdowns. Typically, everyone sells when a certain pain threshold is hit.

I know people who have worked at all of these places.

Maxim Semiconductor (-86% drawdown)
Motorola (-97% drawdown)
Plus countless companies which have failed and delisted (-100%)

Plus the whole dang energy sector, virtually every company in that sector is a poster child of this phenomenon. Because it's boom/bust, just like high tech.

Hindsight knowledge of today is... hindsight. But in the real world, people worked at Nortel, RIM, Bombardier, etc because those were the top employers. The companies looked great at the time. The energy sector looked great at the time. This is why you shouldn't invest in your employer.
 
#18 ·
James, idiots who blindly hold on forever in a falling market Will lose their shirts. This comes from a buy and hold investor. As a guy who works with tech, not in tech, I could easily predict the fall of nortel, rim and many other tech sham companies.i avoided the dot bomb meltdown easily by not buying into sock puppets and the like.

As a tech insider, working for the company, I’d expect they’d have more insight to the companies than I would as an outsider and thus be more successful than someone like me.

besides, you totally missed the point That being an investor, and getting a passive income, there are many ways to do this, is way better than jumping from job to job or Job to school to job. I haven’t changed jobs in decades gotten a lot of unasked for pay raises too.
 
#25 ·
James, idiots who blindly hold on forever in a falling market Will lose their shirts. This comes from a buy and hold investor. As a guy who works with tech, not in tech, I could easily predict the fall of nortel, rim and many other tech sham companies.i avoided the dot bomb meltdown easily by not buying into sock puppets and the like ...
+1 ... and there were lots of articles questioning Nortel's numbers and business projections for a long time before the slide started.


... As a tech insider, working for the company, I’d expect they’d have more insight to the companies than I would as an outsider and thus be more successful than someone like me.
I thought you stayed away from tech.

IAC, where one is putting in long hours as an employee, it's easy to ignore what's happening to the company stock. Particularly if they are focused on their work so that they are putting in insane hours on a regular basis.

That's one amoung many reasons why my friends who had stock options sold a percentage as soon as they could and diversified.


Cheers
 
#19 ·
I worked in technology for most of my career. I willingly participated in employee stock purchase plans. I did very well. Paid down our mortgage. I was conservative. I was also the fortunate recipient of stock optons and RSUs. The RSU's were never worth much and were fully taxed. The stock options allowed me to retire early and comfortably because I practiced common sense when deciding when to exercise them. I know of colleagues who did the same. There were others who followed their options to the top, and back down to he bottom-often so the strike price or lower.. There was seemingly no set rule other than human nature.
 
#26 ·
... The stock options allowed me to retire early and comfortably because I practiced common sense when deciding when to exercise them. I know of colleagues who did the same. There were others who followed their options to the top, and back down to he bottom-often so the strike price or lower ...
Never had options ... but one discount employer stock purchase plan worked out for the small amount I put into it.


... There was seemingly no set rule other than human nature.
Actually ... I think there is. Those who are curious, educated themselves to the risk and benefits made sure to have a plan so that there were less crash/burn results. Those who bought into "it always goes uip, you don't need to monitor/manage" had a lot more crash/burn results.

Nothing scientific, just what I have noticed.

Cheers
 
#20 ·
I find many people are impatient, they only want home runs. when they don’t get that they sit around and complain while demanding handouts from those who are successful. It’s rather pathetic. Anyone in tech should understand that they are working in a field designed to replace employees...it’s not a long term employment industry like in the 50’s. Uber today announ it was laying off people because they are considered employees in California...is anyone truly surprised the company wants to go to autonomos vehicles...this means they will be successful without workers...better jump a getting a job there.
 
#27 ·
... Anyone in tech should understand that they are working in a field designed to replace employees...it’s not a long term employment industry like in the 50’s ...
YMMV ... I was prepared to train in something else that became the new hot item but being able to sell why someone with my depth of knowledge is rare as well as sampling the market on a regular basis has meant about twenty four years of employment instead of the five to ten years that was expected.

I'm learning the new stuff but don't need more than a couple more years before taking early retirement.


Cheers
 
#21 ·
Just because someone works for a technology company does not mean that they have the inside track to how the company is actually doing from a financial perspective. . They may have local insights and hear rumours. That is about it. Especially true for those firms (many of them) whose revenues outside of NA account for 40/50/60 percent of their total revenue and profit. As a tech firm employee I had to re-invent myself several times, acquire new skills, and/or take on new challenges in order to remain with my employer and move forward. I saw many left behind in the industry because the did not want to change or adapt as the industry matured.
 
#22 ·
I remember sitting at lunch with a buddy discussing Nortel. We knew they’d sell you equipment and finance it for you while declaring both at profits. Neither of us worked for the company but we knew they were doing this. If insiders didn’t know they were closing their eyes or blinded by the stock price. If you want to lie to yourself, you deserve to lose the money.
 
#23 · (Edited)
My experience is that some tech firm employees start to believe all the statements from their leadership teams with respect to the stock price and market share. They can easily misread the tea leaves when it comes to looking at their employer from the eyes of the investor or the stock market in general.

You need to keep your eyes and ears open. Drinking your employer's kool-aid all the time can be injurious to your investment strategy and to your employment prospects.
 
#28 · (Edited)
IT is as fast changing industry. The people that I saw who survived (for decades) and moved forward were the ones who were adaptable, the ones who continued to learn and acquire new skills, the ones who kept their ears to the ground and their eyes open for new opportunities-career or learning opportunities. And more often the ones who did not follow the pack and who thought outside the box or were simply forward thinkers. Those who were not afraid to move out of their respective comfort zones to take on a new challenge(s). They worked hard but they also worked smart. I don't suppose that IT is different than any other industry that has moved from an emerging knowledge industry toward a mature industry in such a relatively short span of time.
 
#29 ·
^ This exactly. I try to explain this to the next generation as they learn specific language or go to boot camps for the 'hot' programming flavor of the year. When they learn a specific language, but don't have the foundations, they are only as relevant as the language they learned. Hence why these boot camps get you in the door, but don't keep you in the building.

My spouse has been in tech for decades. He did a masters in computer science and considered going further with a Phd. He has the foundations in development and computer science so he can adapt quiet quickly when something new comes out. This is no different than other industries.
 
#31 ·
I was of the generation that learned to program, then picked a language to use, when I needed a new languag, I pulled a book on the syntax and learned the differences. A loop statement is a loop statement. My code is short and efficien, today more code is better. Breaking down a problem into steps is programming. Today they teach code monkeys not programming.
 
#34 ·
For part of my career, I sold tech based products. In one instance, I sold a product that did not yet exist. The customer wanted a particular function as part of their specification for the product. It was a function that no competitor including ourselves could provide. The normal response to that would be to simply take 'exception' to the requirement in putting in your bid for the contract. I asked the customer WHEN would they need that function to be available (I'm trying to simplify here) and the answer was 'in a year from now' (they would need to first accumulate that amount of historic data before being able to use the function). So I put in the ONLY bid that included the function with the caveat that it was to be delivered in a year. We got the contract and our IT department simply got told, 'make it happen in a year.'
 
#35 ·
We often proposed, forward priced, and presold products for multi year delivery that were not yet available. Typically to military, aerospace, air traffic control systems, process control, etc. This is par for the course when bidding large, multi year delivery systems. In many instances they were custom-base technology adapted to the customer environment, security issues, and integrated with third party hardware and/or software components as required.
 
#36 ·
Yeah, sales would often promise features just to close a sale and get their commissions. No idea if their promises were even possible to deliver, not understanding the complexities involved, just looking at their paycheques.

ive heard that story many, many times from my tech customers and friends Who worked in the industry.
 
#37 ·
No so in my experience. We responded to RFP's, tenders, etc, that were followed up with binding contracts. Often in the tens of millions. The notion of 'no idea that promises were even possible to deliver' was certainly NOT in the realm of my experience with several of the world's largest IT vendors. The bid. risk, and contract reviews that I participated in were extensive. In some cases country approval was not sufficient because of size or scope. We required US parent HQ approval.

I have seen in multiple occasions, often outsourcing, a difference between what the client purchased and what they told or implied to their staff that they purchased especially as it pertained to service level agreements. On the technology side benchmarks we often contracted. In many sales situations the product(s) had to be tested and then formally 'accepted' by the customer prior to billing.

In my experience those who promised things that could not be deliver were soon weeded out by their employers and shunned by customers.
 
#38 ·
Doesn’t that sound like the original complaint about the lack of job secu in the industry? Interesting that you start by saying it doesn’t happen in your experience, then you talk about people who do getting fired for it in your experience, make up your mind. Seem it does, and has happened in your experience.
 
#39 · (Edited)
No...what I said is that in my experience reputable IT firms weed out poor performers. That includes those who purposely misrepresent the product, the service, the undertaking, etc.

Those who create undue risk and liabilities for their employers through their negligence, carelessness, and personal dishonesty. No different that any other business. Absolutely nothing to do with job security in the specific industry.
 
#41 ·
No...getting weeded out for poor performance or unacceptable performance, etc is something that all businesses do. If you were an employer would you keep an unacceptable employee on the payroll? I have let people go for unprofessional conduct...theft, lying, sloppy/unprofessional work, etc. You name it.

Poor or unacceptable performance does not mean job security in an IT or a professional environment. At least not the ones that I was part of. Our customers/clients judged us by our teams day to day performance.

Downsizing is very different. And yes, I have seen it. We may have downsized every two quarters or so but we certainly let people go between those actions if it was required.

Those that got downsized on staff reductions we typically very good employees. It was business, not performance. And most of them secured better or more lucrative employment.
 
#42 ·
Never said it wasn’t something businesses do, I said it doesn’t lead to job security for those hired then weeded out. You hired them, thenyou let them go...not job security by any means or definition. It may be their fault, but that doesn’t change the fact that they don’t have job security.
 
#43 ·
We not only let them go....we typically either got new hires from outside the company or transferred people into those positions who were slated for lay offs/downsizing.

I really do not understand your point. Do you think that an employee who steals or an employee who perhaps makes sexually inappropriate suggestions to other employees or to your client's staff members should be entitled to job security? Really?
 
#44 · (Edited)
I really do not understand your point. Do you think that an employee who steals or an employee who perhaps makes sexually inappropriate suggestions to other employees or to your client's staff members should be entitled to job security? Really?
Those are not the kind of layoffs I've seen.

Companies like Intel routinely over-hire (they deliberately hire about 25% more than they need), make them compete under fear of losing their jobs, and then fire the bottom 25%. So they don't fire them because it's necessary to let people go for business conditions; they fire them mainly to reinforce the competition, and to keep people afraid.

It's considered normal routine in many high tech companies. Has nothing to do with negligence or bad employee behaviour. It's just a way to make the rats work as hard as humanly possible... the Intel guy who came up with this great management technique wrote a book on this.

I worked for a company that used that Intel play book. I could only handle it for 2 years and it gave me high blood pressure. A condition which immediately went away when I quit, and has never come back since.

Also, "tech" is not just IT like you are talking about @ian . There's software development, video game development, engineering services, hardware engineering, computer engineering... many different fields. IT is just one area of tech. I am not very familiar with the IT sector but in many of these other fields, routine layoffs are quite common. Even for properly behaving and productive employees.

In fact I think one of the biggest mistakes a tech worker can make is assuming they have a "secure job" because they are hard working and productive. Being a good worker only gets you so far in tech (esp high-tech) and you should always be prepared for layoffs and job loss, IMO.
 
#45 ·
To address the OP, if tech is changing is it some fundamental transitional shift, or another in the many waves of contraction and growth that occur regularly? The current economic malaise must be having a large impact on IT development projects. I would not be surprised to see more of what J4B has described, but I think it's just a phase. There may be a lot of big-bath-accounting in Q4 as companies write things off and clean up balance sheets.

A book called Shifting Gears: Thriving in the New Economy was written by an economist named Nuala Beck in the early '90s. The author wrote that growth in the economy was changing from older industries like manufacturing, mining, construction to new generation industries like computers, IT and telecommunications. She hypothesized that traditional industries would suffer as the economy was coming to the end of secular post-war growth, especially in the western developed world. Those industries and jobs would continue to exist, but their employment and earnings potential would diminish, while jobs in IT, telecommunications, pharmaceuticals, instrumentation would show sustained growth. That does not mean there would be great job security in growth industries, in fact quite the opposite, where new companies and technologies would come and go, and workers would experience job insecurity and turmoil, but there would be many new companies with good growth and employment opportunities. Contrast that to manufacturing or resource industries, where if you work at the one plant in town and it closes, your job opportunities are really limited and you may have to move or accept a lesser position. Think how many GM employees in Oshawa will be lucky to find a job paying half as much when that plant closes. Tech <> job security, but it can be career security. Many Nortel and RIM employees got laid off, but there are a lot of companies that want those skills and experience, so career opportunities are often good and lucrative. I said can be, because technologies march on, and you need to keep your skills and technical abilities up to date. A good friend of mine was a DEC VAX programmer making good money, but in the late 2000s most VAX equipment was replaced by newer platforms. His career ended because the good times blinded him to industry changes. Lots of people become independent contractors opening up huge opportunities for interesting, clean, lucrative careers with plenty of opportunities to take time off.

The book resonates with me because the first 1/3 of my career was in sales and marketing to heavy industries like iron & steel, machine tools, power generation, mining. By the late 80s I could see that growth potential was diminishing for a number of reasons including more efficient processes, slower infrastructure growth in developed countries and growth shifting to an endless series of other countries including Japan, Taiwan, Bangladesh, Malaysia, China.

So I decided to change careers and set telecommunications as one of my target industries because it had cool technologies, was deregulating drawing many new opportunities and growth, and had great potential to improve peoples lives through technological change. Opportunities abounded, although lots of boom-bust, and it was usually very lucrative relative to many industries. It was fascinating because we had a real sense of developing things that would improve productivity, drive enhanced capabilities and make peoples lives better. Imagine life without online banking, mobile phones, wi-fi, Bluetooth, medical imaging, bar codes, car safety systems and so many more.

Tech is fascinating but stressful. It has bad job security, but good career security. It can be very lucrative but you have to be able to ride out the bad times. You need to learn and evolve or see your career disappear out from under you. It makes an incredible amount of money for a few investors and extracts a lot of money from many naïve investors. It is fascinating to work in because it has potential to enhance productivity and improve many peoples' standard of living and lifestyle. It's not a career choice for the masses.
 
#46 · (Edited)
We were never, ever allowed to over hire. Quite the opposite. Hiring reqs were sometimes as scarce as hen's teeth. Not certain where the 25 percent over hire ever came from. It meant that we had to be very careful when we hired. The tech that I worked in was downsizing, rightsizing whatever on a very regular basis.

What did I work on and have responsibility for at one time or another? Large technology hardware sales, software consulting, custom technology solutions, customer application development,/ turnkey projects, project/contract management, remedial services, outsourcing, help desks, general management w/ p&l responsibility. Always on the pointy side, ie interfacing with customers, clients etc. Zero experience on the hardware product development side, firmware, etc. Almost no PC exposure other than on bulk sales w/ desktop services and integration. I was very, very familiar with the VAX product line.
 
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