Silicon Valley is seeing pink. Hit by turmoil in the financial markets, general economic decline, and slowing sales, the tech sector is expected to follow Wall Street with its own mass layoffs.
Rumors abound that AT&T (T), Yahoo (YHOO), and eBay (EBAY) will together release thousands of workers into the unemployment pool. Those will add to the mounting figures: Earlier this year, Sun Microsystems (SUNW)let up to 2,500 employees go; Nortel (NT) is cutting 2,100 jobs; Hewlett-Packard (HPQ) will reduce staff by nearly 25,000 following its acquisition of Electronic Data Systems; and even Google (GOOG) got into the game with the shedding of 300 jobs at DoubleClick.
According to the San Jose Mercury News, there are around 1,417,000 people out of work in California alone. That's up 413,000 from this time last year.
Thursday, Alley Insider posted an anonymous tip that Yahoo! will soon be axing 3,500 jobs.
Yahoo! has been in a five-year stock slump and is down 8 percent so far today. Its third-quarter earnings come out October 21 for investors to see whether rumors of cost cutting through layoffs are warranted.
There's also talk that eBay is planning on scaling back its workforce by 10 percent, roughly 1,500, as reported by Barron's. The online auctioneer has been taking heat from users over its new fee structure and the strengthening U.S. dollar has slowed down sales from overseas.
No new cuts are coming out of AOL, but the troubled portal did drop two popular sites--the blogging site AOL Journals and the webpage creator and hosting service AOL Hometown. Revenue for AOL has been down by a third from a year ago, as Time Warner (TWX) reported in August, putting Microsoft (MSFT) and Yahoo in better positions to make a play for the company. But AOL's sinking numbers aren't so good for Google's $1 billion stake in the company.
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