Digital Daily » market conditions

MySpace | A Place for Layoffs, Redux

John Paczkowski — Tue, 23 Jun 2009 12:00:19 +0000

MySpace has extended its war on bloat overseas. This morning the company announced plans to close at least four of its offices outside the U.S. in a bid to reduce costs. Some 300 of the company’s 450 international employees will lose their jobs as a result.

“It was clear that internationally, just as in the US, MySpace’s staffing had become too big and cumbersome to be sustainable in current market conditions,” said MySpace CEO Owen Van Natta. “Today’s proposed changes are designed to transform and refine our international growth strategy.” Operations in Argentina, Brazil, Canada, France, India, Italy, Mexico, Russia, Sweden and Spain are “under review,” he added, and face possible closure.

The cuts follow a 30 percent reduction in headcount in the states last week and the hastening erosion of MySpace’s position in the social-networking market. MySpace lost the title of world’s most popular social network to rival Facebook last year and was overtaken by it in the U.S. last month as well.

Microsoft: Mr. Acquisitive?

John Paczkowski — Mon, 11 May 2009 18:58:48 +0000

With $25 billion in its coffers, Microsoft isn’t exactly hurting for cash. So why is the company planning a bond offering that could raise billions in additional capital? Microsoft (MSFT) won’t say, exactly. “The company is not in need of financing,” a spokesperson explained in a statement. “It is taking advantage of good market conditions and Microsoft’s great credit rating,” adding that proceeds from the sale of the notes will be used for “general corporate purposes.” Those include working capital and share buybacks. They also include acquisitions, which, as investor Eric Jackson notes, the company could use more of.

And this is certainly a good time to buy. “To be successful in the long run, Microsoft needs people to green-light the best acquisitions and teams of people with the right skill sets to integrate them,” Jackson writes. “Frankly, Microsoft hasn’t shown it has either of those abilities. Microsoft investors don’t need another expensive aQuantive deal or Facebook investment that smacks of desperation and has questionable long-term value for the company’s shareholders. It needs to take a page out of IBM’s and Oracle’s playbook, though, and start doing deals to grow its top and bottom lines. A big debt issuance, with a skilled acquisition team, and evidence of some exciting growth-related deals could suddenly show the market that this elephant can dance again.”

Alcatel-Lucent: Our Earnings Stink in French and English

John Paczkowski — Tue, 05 May 2009 13:29:27 +0000

The econalypse is eroding demand for telecommunications equipment. Operators are cutting spending for network upgrades. Market conditions are tough, but we are taking appropriate actions. It’s a story we’ve heard before, from Ericsson (ERIC), Nortel (NT) and Cisco (CSCO). This morning we heard it from Alcatel-Lucent (ALU). The French-American telecommunications maker said today that its first-quarter net loss more than doubled from a year ago amid a souring economy that’s got its customers slashing capital expenses to preserve cash. With sales down 6.9 percent, Alcatel lost $563.6 million in the quarter, more than twice last year’s $241.7 million loss.

Ugly, even more so considering this is the company’s ninth consecutive quarterly loss since it was created in 2006.

“While expected, given seasonality and tough market conditions, we are not pleased with the operating loss incurred in the first quarter,” said CEO Ben Verwaayen. “Our guidance for the year remains unchanged and we are taking appropriate actions….There’s lots of work we still need to do.”

Fairchild's Year Without a Santa Claus

John Paczkowski — Fri, 12 Dec 2008 18:21:41 +0000

If life is a cement trampoline, then Fairchild Semiconductor just performed a flat back landing. It’s hand forced by those oft-cited “market conditions,” the company said Friday it is sacking 12 percent of its workforce, or 1,100 people, in an attempt to reduce expenses and spread holiday cheer.

Fairchild (FCS) reduced its guidance as well. It had been expecting $338 million to $360 million in sales for its fiscal fourth quarter. Now it expects just $320 million.

Fairchild is the latest semiconductor company to temper its estimates as demand for the computers and telecommunications gear in which its chips are used contracts. Earlier this week, Texas Instruments (TXN), National Semi (NSM) and Broadcom (BRCM) all cut their projections because of lousy market conditions.