Kara Swisher

Recent Posts by Kara Swisher

Layoffs Hit Silicon Valley: HP Today, Who Tomorrow?

Of course, the layoffs at Hewlett-Packard (HPQ) were expected, part of its cost-cutting integration after the $13.25 billion acquisition of Electronic Data Systems.

HP said yesterday that the 24,600 jobs the tech giant axed, or 7.5 percent of the total work force, were made to “streamline the combined company’s services” businesses.

But BoomTown has to wonder if other big tech and Internet companies might not be looking at HP’s move and the current economic mess and wonder if it might be a good time to pare down a bit, after a spate of overhiring.

In fact, the ill winds that will surely be blowing west from Wall Street remind me of the classic lines of noir crime novelist Raymond Chandler:

There was a desert wind blowing that night. It was one of those hot dry Santa Anas that come down through the mountain passes and curl your hair and make your nerves jump and your skin itch. On nights like that every booze party ends in a fight. Meek little wives feel the edge of the carving knife and study their husbands’ necks. Anything can happen.”

Indeed, bad times, as one smart exec told me yesterday over lunch, are very good times to clean house.

And, as I wrote yesterday in post called “Dear Web 2.0: It’s Still the Economy, Stupid,” the frightening gyrations of the financial markets will surely impact Silicon Valley, as much as the culture here tries to pretend it will never be affected.

And that’s why I am guessing the sector is going to be seeing some judicious job cuts from managers in the next few months.

Yesterday, for example, our most excellent blogger contributor, Eric Savitz of Barron’s, cited a report by Wedge Parters on the online auction giant eBay. Paraphrasing the Wedge report, he noted “the company’s business is ‘deteriorating’ and that the company is readying layoffs that could affect 10 percent of the company’s 15,000 employees.”

Many think companies like Yahoo (YHOO), Microsoft (MSFT) and even Google (GOOG) must start to smartly make cuts–even if they add in other areas–to make sure that they are lean and mean in a less frothy market.

And I am also guessing start-ups, even those flush with investment cash, have to be thinking hard about spending as freely.

While you certainly can’t cut your way into growth, a little prudence is one quality Web 2.0 is probably about to learn.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik