Technology has a reputation for adapting to what its consumers want.
A Blackberry with a touchscreen?
It’s in stores.
A computer so thin it fits in a manila envelope?
You got it.
But few companies can adapt to consumers who, in a time of recession, aren’t spending any of their incomes — or lack thereof — on unnecessary technology hardware.
Although the industry isn’t on the Bureau of Labor Statistics’ list of the 19 most-affected industries in terms of mass layoffs — the list includes mining, construction, manufacturing, wholesale and retail trade, and real estate — reports of hundreds-plus layoffs have been increasing since the end of last year, according to TechCrunch, a Web site that chronicles the industry’s progress.
The site gives a rough estimate of 310,000 for how many employees have joined the ranks of those involved in mass layoffs.
“If consumers are fearful of job loss and incomes are down, technology hardware is something they can postpone buying, just like clothes,” Walden said.
North Carolina unemployment rates spiked to 9.7 percent in January, pitting the state against just five others, including South Carolina and California, for highest unemployment rate in the nation.
A national unemployment rate of 8.1 percent in February, up .5 percent from the previous month according to the Bureau of Labor Statistics, hasn’t repaired a widening hole in consumer confidence. The Conference Board, which surveys 5,000 households a month in an attempt to measure the public’s level of optimism in the state of the economy, reported consumer confidence plunged to 25 out of 100 in February. That’s a 12-point drop from January.
Walden said consumers who haven’t been laid off are hesitant to spend an income that might not be deposited into their bank accounts in a few months; those who have been laid off or asked to stay away from work on extended leave are even more unwilling to upgrade technologies like computers, cameras or system accessories.
Local businesses like Dell, based in Texas but with a branch in Winston-Salem, and Morrisville’s Lenovo have reported layoffs that total at least 150 and 50, respectively. And Research Triangle Park employees aren’t immune to layoffs, either — Sony Ericsson laid off 450 of its employees in September, according to the Triangle Business Journal.
“The technology industry has been adversely affected, like every industry,” Walden said. “We have seen layoffs in the Triangle. The reason for that is this is a very, very bad recession that is affecting everything.”
Not all tech companies are negatively affected by a bear market. Some tech companies, Walden said, are more resilient in poor economies. This time around, Walden said the phone industry happens to be doing well.
“One area of technology that has enjoyed growth has been phone devices, especially smart phones,” he said.
