From hardware companies to software giants and game makers, layoffs have become the norm in the tech industry. For a sector with historically high demand, many are asking what has happened to put so many tech professionals out of work. Earnings were projected to grow by more than 7% through 2013, but have instead declined 3.6% this year. This earnings drop is at least part of the reason that employment is suffering.
Major companies are seeing stagnation in their traditional product lines and services. Oracle, IBM, Zynga, HP, Cisco and other industry heavyweights have been forced to cut legacy products along with the employees who deal with them. For the biggest players, competition, changing markets, and restructuring costs have eaten into cash flow. Interestingly though, market changes and competition can’t be blamed for the whole problem because start-ups have been hit hard as well.
Start-ups like Lytro and TaskRabbit aren’t faring much better than their established counterparts. In fact, many start-ups are struggling.They too point to restructuring as the cause of their revenue decline, but the truth is that demand has waned. The economic recovery is still weak and consumers simply aren’t buying. Add to that a lack of major innovation in the tech sector and it isn’t a wonder that revenues are falling.
There is good news for job seekers though. Some start-ups are doing quite well. The difference between success and failure has come down to innovation. The most innovative products are still doing well. Understanding where growth will be starts with understanding industry trends. A solid grasp of the basics can be obtained by studying infographics that distill out the most salient industry statistics.
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