Business Tech

Advanced Micro Devices warned Thursday its fourth-quarter revenue will come in significantly lower than previously expected, due to weakness across all regions in all its businesses.

AMD shares were climbing back up in the morning, after having dipped to as low as $1.92 just after the markets opened.

The chipmaker said Thursday it expects to post revenue of $1.19 billion in the quarter ending December 27, excluding process technology license revenue. That's 25 percent below its third-quarter performance.

When the company reported its third-quarter revenue of $1.59 billion (excluding the process tech license revenue) in October, AMD predicted its fourth-quarter revenue would be "roughly flat" that of the third quarter.

While AMD is still willing to issue a forecast for its fourth quarter, a number of companies that have released quarterly warnings since late October have indicated they are not willing to stick their necks out again in this uncertain climate.

SAP, for example, pulled its year-end forecast, after reporting third-quarter results. And Dell, when it reported its third-quarter results, declined to provide any guidance on how it expected the fourth quarter to shape up.

With the overall economy slumping, the tech industry is taking its fair share of hits. We'll keep updating the chart below as news of company changes comes in. See our complete coverage of how the tech sector is faring here: Tracking the tech downturn.

Know of a layoff not listed here? Let us know on this form or e-mail us.

See also: The spreadsheet of sunshine: Who's hiring.

AT&T joined the long list of companies laying off workers, announcing on Thursday that it would eliminate 12,000 jobs, or roughly 4 percent of its workforce.

The company cited economic pressures and a changing business mix as the reasons behind the cuts.

AT&T also said it plans to reduce its 2009 capital expenditures from 2008 levels. The company said it would issue more specific financial guidance in January, when it announces its fourth-quarter results.

It did say, however, that as a result of the layoffs, it would take a charge of approximately $600 million in the fourth quarter of 2008 to pay severance to affected employees.

The cuts will begin in December and continue throughout 2009, AT&T said in a release.

The company said it is continuing to add positions in wireless, video, and broadband units to meet customer demand.

IBM wants corporate customers to cut the cord with Microsoft.

The tech pioneer is launching a Linux-based collection of virtual-desktop applications that run on a server without the need for desktop hardware--or Microsoft software, according to a report on Wednesday evening by The Wall Street Journal. The Linux-based software package, which is available now, runs on a back-office server and is accessible to customers on thin clients, the paper reported.

The Virtual Linux Desktop ranges in price from $59 to $289 per user, depending on level of software and service desired, according to the report. IBM estimates that the software package could save corporate customers up to $800 per user, when compared with the cost of maintaining Microsoft's Vista operating system, Office suite, and collaboration tools, the newspaper said.

IBM is counting on the prevalent economic pressures to help make its "Microsoft-free" suite more appealing.

"Deploying your technology this way is going to save you something more than 50 percent of your total costs," Jeff Smith, IBM's vice president for open source and Linux, told the Journal. "As customers face an increasingly challenging economic situation, they're looking at everything they're spending money on."

Cost aside, however, corporate customers may not be ready to embrace an environment where their data is stored centrally instead of locally.

With a back-to-the-future technology called JavaFX to be launched Thursday, Sun Microsystems hopes to attract a new class of developer while building a much-needed new revenue source.

JavaFX 1.0 returns to the sales pitch that Sun used during Java's launch more than 13 years ago: a foundation for software on a wide variety of computing "clients" such as desktop computers or mobile phones. JavaFX builds on current Java technology but adds two major pieces.

Sun CEO Jonathan Schwartz

(Credit: Stephen Shankland/CNET Networks)

First is a new software foundation designed to run so-called rich Internet applications--network-enabled programs with lush user interfaces. Second is a new programming language called JavaFX Script that's intended to be easier to use than traditional Java.

But JavaFX faces some steep challenges. Chief among them: while Sun spent much of its energy adapting Java for servers, a host of other software options for building rich Internet applications sprang up. Java paved the way in 1995, but now it's got to take on Adobe Systems' Flash and AIR, Microsoft's newer arrival, Silverlight, and JavaScript and its more sophisticated cousin Ajax.

"This is the essence of the Hail Mary," said Illuninata analyst Jonathan Eunice. "I would like to think there's a role for Java on the client, but it's very late."

But Chief Executive Jonathan Schwartz, despite Sun's dropping revenue, low stock price, and large new layoff, believes that JavaFX will overcome its obstacles.

"Don't confuse relevance for stock price," he said, pointing to Java's widespread adoption among developers and students, and to Sun's expansion into newer open-source areas such as the MySQL database software. "We're more relevant today than any other software developer on the face of the Earth."

And while JavaFX may not be widely discussed today as a rich Internet application foundation, "I promise you that will change in next 60 to 90 days," Schwartz said.

Java's stronghold
With help from allies such as IBM, Sun built Java into a powerful technology for server software tasks such as running stock-trading applications. And it gained a stronghold on millions of mobile phones.

But it missed out on desktop computers, where it was notoriously slow to load, and lost out chiefly to JavaScript built into the browser and to Adobe's Flash plug-in. On mobile phones, Java has suffered from a sprawling set of optional features that undermine its "write once, run anywhere" promise to developers. Different phones essentially have different varieties of Java.

JavaFX is designed to address both of those issues. First, a more unified "runtime" foundation spans PCs and mobile phones, though the latter version isn't expected until the first half of 2009. And this time, Sun supplies it in an unmodified form so phone manufacturers won't splinter it into incompatible versions.

Sun is promoting JavaFX as a good way to write rich Internet applications. (Click to enlarge.)

(Credit: Sun Microsystems)

"We're making our binaries available" to mobile-phone makers "so we can unify the Java platform implementations," said Schwartz, who expects rapid adoption. "We're starting with a couple billion handsets in the marketplace and swimming downstream."

The business case
Sun also will charge those handset makers a per-unit royalty for JavaFX, and right now, Sun needs all the revenue it can get. Although Java has been good for Sun's brand, it hasn't been a cash cow, but here again, Schwartz has high expectations.

"Java has become the single most profitable software product at Sun, growing more rapidly than any other," he said, pointing to billings (PDF) that Sun charged customers in the company's most recent quarter.

In raw revenue, though, its 18 percent growth to $34 million lagged that of MySQL, for which billings grew 50 percent annually to $37 million. And Sun's hardware revenue still is an order of magnitude larger than its software revenue.

Schwartz also believes that JavaFX has more appeal to content providers because it comes from a neutral technology supplier, not a potential rival.

"The problem with browsers, when viewed as the default mechanism for delivering content for the Web, is that browsers have become hostile territory," Schwartz argued. "Internet Explorer is owned by Microsoft. Firefox is owned by Google, at this point. Chrome is owned by Google. Beyond that, with maybe (the exception) of Safari, which is owned by Apple, there is no safe route to distribute your content into the marketplace."

Perhaps JavaFX's open-source nature reduces the threat that Sun could hold a business partner hostage. But when it comes to safety, there also are risks to betting on new technology.

Distributing JavaFX is another challenge. The auto-update feature in desktop Java will take care of PCs, starting next year--though people will be able to actively download it sooner in coming days--but for mobile phones, Sun relies on handset makers and electronics companies such as TV makers to build it in.

EZ coding
JavaFX is designed to be easier to use too. The JavaFX Script origins lie in a project originally called F3, short for the "form follows function" slogan from the Bauhaus school of architectural thought.

"You can use Java to solve difficult problems," but doing so often requires sophisticated programming, said Eric Klein, Sun's vice president of Java marketing. And regular Java isn't well-adapted to creating basic, media-rich applications that run in browsers. Building a simple media player application in Java takes 100 lines of code, but JavaFX Script can do it in 20 or 30 lines, he said.

"The goal was to make (the) power of Java accessible to an entirely new class of developers," Klein said. "For existing developers, it would accelerate how fast they could get things done."

JavaFX also comes with a slick feature, the ability to move running applications out of the browser and onto the desktop--and back, if desired. Essentially, they can change their nature and abilities according to where they're housed. And the same application also can run on JavaFX Mobile, holding the promise for programmers that they won't have to endlessly rewrite the same applications for different media.

"You can build a media player, run it in a browser, then you can simply drag it out of your browser onto your desktop, and it becomes a desktop application automatically. It's the same code, the same application," said Jeet Kaul, Sun's senior vice president of Java engineering.

Moving to the desktop, the application could take advantage of new screen real estate that affords a better user interface and new permissions for tasks such as writing files to a hard drive, Kaul said.

Again, though, incumbent players have an edge. JavaScript has matured as an interface language, Flash has many loyal developer fans, and Silverlight is powerful, Eunice said.

"I'm invariably skeptical that a language you don't know yet is going to be easier than all the languages you do know," Eunice said. And unlike with earlier chapters of the Java saga, "Sun has to do all this heavy lifting on its own."

iSuppli releases its preliminary 2008 top-20 chip rankings as semiconductor suppliers fall upon hard times.

Intel, Samsung, Texas Instruments, Toshiba, and STMicroelectronics occupy the top five positions, while Advanced Micro Devices was No. 11 and Nvidia No. 20 in the ranking.

Memory chip manufacturers are some of the hardest hit. South Korea-based Hynix, which dropped from No. 6 to No. 9, and Micron Technology (No. 16) are both restructuring. Micron is reducing staff and shutting down facilities, while Hynix seeks outside investors.

Micron is expected to post a 9.2 percent revenue decrease in 2008 and Hynix's revenue should dive by about 29 percent in 2008, iSuppli said.

The world's largest memory chip supplier and the world's No. 2 chipmaker, Samsung Electronics, is set for a 9.1 percent revenue decline for the year, the market researcher said.

Toshiba, a major flash memory chip manufacturer, is expected to post a 5.9 percent decline in chip revenue in 2008.

iSuppli said 2008 will go down as "a year to forget" for memory chip suppliers.

Preliminary 2008 worldwide ranking of the top 20 chip suppliers

(Credit: iSuppli)

Munich, Germany-based Infineon (No. 10) said Wednesday it expects 2009 revenue to fall at least 15 percent from the previous year. Infineon makes chips for automotive and communications devices, but is also a large player in the memory chip market through its subsidiary Qimonda.

Global semiconductor revenue is expected to decline by 2 percent in 2008 due to a 16.9 percent plunge in sales of memory integrated circuits (ICs), iSuppli said. "Only two out of the Top-29 memory IC suppliers, i.e. companies that are expected to earn roughly $100 million or more in 2008, will see their memory IC revenue grow in 2008. For the memory IC business, 2008 can only be described as disastrous," Dale Ford, senior vice president of market intelligence services for iSuppli, said in a statement.

The downturn in semiconductor revenue in 2008 is not limited to memory suppliers. Six of the top-10 chip suppliers are expected to see revenue falls in 2008, including some companies that are not focused on memory, including Texas Instruments, Renesas Technology, and Sony, according to iSuppli.

"In the face of increasingly negative economic news, orders for semiconductors have virtually stopped," the market researcher said.

"About the only good thing that can be said about the 16.9 percent decline in memory revenue in 2008 is that it pales in comparison to the 48.2 percent plunge in 2001," Ford said.

And a few companies have been performing relatively well. Based on an expected revenue growth of 19.6 percent, Qualcomm is expected to jump five places to No. 8 in the rankings in 2008, up from No. 13 in 2007, iSuppli said.

Adobe added its name Wednesday to the list of companies warning of weaker sales and cutting jobs.

In a press release, the company said it would slash 600 jobs amid less-than-anticipated demand for its recently launched Creative Suite 4 series of products.

"The global economic crisis significantly impacted our revenue during the fourth quarter," Adobe CEO Shantanu Narayen said in a statement. "We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities."

The company said it now expects per-share earnings of 45 cents to 46 cents, on revenue of $912 million to $915 million for the three months ended November 28. The company had expected sales to come in as high as $955 million. The company said it expects revenue to drop further in the current quarter, with expectations now for revenue in the range of $800 million to $850 million.

The company said it will take pre-tax charges of $44 million to $50 million to account for the restructuring.

Among the things the company is apparently cutting: its booth at Macworld Expo.

Analysts are readjusting their expectations for the PC industry next year, and it's not looking good.

On Wednesday, IDC released an updated forecast for the number of PCs expected to be shipped next year. In 2009, PC shipments will rise just 3.8 percent worldwide, according to the report.

That's a drastic cut from the 13.7 percent growth IDC had predicted for 2009 earlier this year. The hardest hit areas will be the emerging PC markets of Latin America, Central Europe, the Middle East, and Africa due to falling commodity prices and the worldwide credit crunch.

But the U.S. PC market is expected to fare even worse. Next year will bring a decline in shipments of PCs by 3 percent compared to this year. However, IDC says that there will be "low single-digit" increases in the years following.

The key factors affecting PC shipments are the rate of portable PC adoption, falling prices, and the PC upgrade cycle.

"Low-cost mini notebooks will help volume, but pressure margins and revenues," said Lore Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Consumer and commercial segments will be much more conservative in their purchases over the coming year or two, and while low prices will remain essential, they will not drive volumes as they did in the past few years."

Visitors to e-commerce sites spent $846 million on Monday, an increase of 15 percent over the same day a year ago, according to ComScore.

Monday, referred to as Cyber Monday by online retailers, capped off a successful Thanksgiving holiday weekend for the industry, which overall saw spending jump 13 percent.

It's a welcome relief for an industry that was mostly bracing for the worst.

"Consumers are clearly responding positively to retailers' aggressive online discounts," ComScore Chairman Gian Fulgoni said in a statement. "With Cyber Monday promotions beginning in earnest over the Thanksgiving weekend, consumers have finally begun to open their wallets, setting off a streak of four consecutive days of extremely strong growth..."

ComScore ranks the $846 million spent Monday as the second-biggest day of online shopping ever. That should be encouraging to retailers, since typically Cyber Monday isn't the biggest spike in online sales for the holiday season, just the first, according to retail analysts.

It also comes on the heels of a better-than-expected Black Friday shopping day, so the retail picture this holiday may not be quite as dreary as expected. What remains to be seen, however, is whether retailers were able to draw any sort of profit after the aggressive promotions that clearly attracted shoppers.

Editors note: This is part of a series of stories about the recession's effect on the tech industry.

Over the last few months, there have been countless stories of cutbacks at companies large and small. Real people are losing jobs. For some, that means losing their homes or being forced to change careers. In this series, CNET News is telling the stories of many of the people on the receiving end of the hits recently sustained by the tech industry.

Click for complete special report

But there is another side to layoffs that doesn't get told very often. That's the story of the people who do the laying off, those who make the decisions about who stays and who goes. Do they deserve our sympathy or our derision?

In most cases, the answer is neither. While there will always be an evil schemer or two out there, most executives who conduct layoffs realize they're cutting into their company's most valuable asset: the employees. Sure, it's a corporate cliche, but most of them do believe it.

We talked to the chief executive of a Web 2.0 company that recently axed a bit less than 10 percent of its workforce and asked him to walk us through the process. Not surprisingly, he did so on condition of anonymity. He's running his third company now. This business is his second Web 2.0 outfit, and is generating revenues from a mix of sources, including subscription fees and advertising. It's an established business, not a brand new Web start-up.

The job cut process, as he described it, was driven by raw numbers and business instinct. No Seven Stages of Grief here, just plain old business sense. Like it or not, this is how it usually works in corporate America:

Q: Why did you do layoffs?
CEO: It's clear that 2009 is going to be a different year than we had anticipated. There's no question that we're in a recession, and we expect that next year could be severe. It's really important for companies to do everything they can to keep costs low, and be able to sustain themselves.

This layoff was based not on an actual decline in revenues, then, but a projection?
CEO: We did see some softness in Q3 and Q4, and projections are that the softness is going to continue. One of the things that makes this very difficult is the uncertainty. It's very hard to plan for next year.

How many people did you lay off, and was it a one-time thing, or should we expect more in 2009?
CEO: We let go less than 10 percent, and that is the most difficult aspect. You don't want the layoff to be too big, and you don't want it to be too small. If it's too big, then you've impacted too many people and damaged your ability to execute. If it's too small, you run the risk of having to do it again, and doing that suggests that it's not going to be a one-time thing, but that it's an ongoing thing. And that creates huge amounts of anxiety. So that is the real risk.

It's hard to say what will happen next year. You take risks either way. We say we're doing this so we never have to do it again.

Could you have foreseen this?
CEO: People were expecting a meltdown on Wall Street. It reminds me of back in the bubble days, when people were expecting the bubble to burst. But until it burst, it wasn't rational to behave as if it were going to. Alan Greenspan talked about irrational exuberance in 1996, and it wasn't until 2000 that the exuberance really burst, so it's a very hard thing. In retrospect, sure, there are things we should have done. And it is possible that in six months from now, we'll be saying that in retrospect we didn't know it was going to get this bad. You may see another wave in six months. And it's possible that we all make it through, that the economy picks up.

When did you have that "I'm going to throw up" moment and realize that you were going to have to let people go?
CEO: I don't know if it was like that. It's hard to say exactly when we made the decision. It came to a process of forecasting our business and determining what an acceptable expense ratio was for the business going forward. When we reforecast our business for the second half of the year and evaluated the risk, we realized that our cost basis was just too high.

So when you realize that you have to trim your staff, who gets involved?
CEO: It starts with the heads of our business units, the people who have (profit and loss accounting) responsibility, and the people who are responsible for your revenue lines as well as the bottom line of the business. You first have to have a really strong gut check as to where you feel the business is going to go. You certainly would rather figure out ways of generating more revenue, and the first conversation wasn't about how to we cut costs. We asked, "How can we respond to the changing market conditions? Let's not just think of this as the market getting smaller, but the market is changing, and we ought to adjust our strategy to match. There may be positive ways to do that." And eventually you have to talk to the board.

You don't start with the board?
CEO: There's been a lot of discussion about this. For example, Sequoia brought in their CEOs and told them: This is the way it's got to be. But any CEO who needs to wait for their board to tell them what to do in terms of their expense structure is not doing the right job. It's the management team that ultimately has to make the call. Boards can give advice and ultimately judge the effectiveness of the CEO, but this is something the management team has to own.

I would never want to be a Sequoia portfolio company. Those guys are so heavy-handed in the way they treat their companies. They see the CEOs as interchangeable. I think a lot of people did layoffs because of the slideshow.

How long does it take to put a layoff together?
CEO: For us it was a matter of weeks. We did want to have a structured conversation with the board about what we were proposing. It's very important to have a back and forth, get their advice and their opinions. Also, we wanted to invest enough time in this to make sure we were making the right moves, that it was the right degree, and that we were structuring the company appropriately, and weren't just thinking of this in a one-dimensional way, which is "how do we cut people?"

It was, instead, "how do we structure the company to adapt to the changing conditions?" And that may include other organizational and strategic changes beyond just cutting people. And that's very important. We also wanted to look closely at other ways to cut expenses and generate revenue.

Was there anyone who, at the end of the planning process, changed status, from staying to going, or the reverse?
CEO: Yes. You're trying to figure out the best mix to make the company successful going forward, and that's an iterative process. And in some cases, we wanted to make sure that there weren't opportunities for people in other parts of the company. We took into consideration not the performance of people, but their skill sets and how they could contribute going forward.

How did you tell people?
CEO: We spent a lot of time thinking through the process. The management team went offsite several times to discuss it. We talked through the logistics on how the day would work, and we iterated on it. We really thought through how this would happen. The details of it really do matter.

We decided the best way to do it was to talk to the people individually first. We tried to figure out how we could get the message to people one-on-one, in person, explaining it to them so they knew first, rather than doing a whole announcement and then tapping people on the shoulder. We told people one by one, by their direct managers, and then we had exit interviews, and then we told the rest of the company what was going on. To the extent we had managers who would be eliminated, we told them beforehand.

Did anyone, on the way out, do any bridge burning?
CEO: No one. It was moving, actually. And I haven't seen many stories about people being nasty or bitter. I think people have been pretty mature about this.

What did you do afterward? Did you go out drinking with everyone who was left behind and toast the departed?
CEO: We did. We set a time for everyone to get together and say proper goodbyes. I think it's a real mistake to treat people you've let go as if they're not people or not part of the family anymore or it's too awkward to look them in the face. That's not respecting them the way they deserve.

What's it like to go home after a day like that, to go home to your family and your kids and realize that other people are going home now without jobs, and will be worrying about Christmas and paying for schools?
CEO: It's tough. But once you've made the decision, if you've put enough thought and work and diligence into the decision, then you can be at peace with it. If you did it on a whim or because a board member told you to or because it seemed fashionable, then I assume you would feel more uncomfortable. If you've really done your job, then you can be at peace.

The best thing you can say is that you have thought through what you were doing long enough to know that it was the right thing. My obligation is to the company, and I've got to think about how I can create something sustainable for everybody, and worry about the jobs we still have here as well the jobs we have to cut.

And the next day? What's it like for you?
CEO: For me, it was checking in with people. The key thing is to focus on the company that you have after the layoff. It creates the ability for you to set a new tone. If there was any complacency in the company, this is an opportunity to make sure that doesn't exist anymore. It's really about moving forward, and having people realize that this company is moving forward.

Have you been in touch with people who are no longer with you to help them out in any way? How's it going?
CEO: Yes. It's a tough market. But we do try to help everyone who's laid off. If we can help them get a job or make introductions, we have been doing that. We're tracking everybody and how they're ending up. There's only so much we can do, but we do think it's important.

Has anybody landed a new gig yet?
CEO: Yes.

What advice would you give to people who are doing this for the first time?
CEO: To be as honest as you can about the process.

But this is not a process that lends itself to being open. If I'm at a company and I know times are tough, and you're the CEO and you know a month from now you're going to do layoffs, do you let me know that a month from now I might not have a job?
CEO: That's the hardest part. Which is why, once you've come to the determination that you're going to cut costs or do layoffs, it's best to move as quickly as you can. Then you're not in the awkward space where you have to be circumspect with your team.

Do you let them know you're making those plans?
CEO: No. I think you can acknowledge the circumstances of the company. You can talk about the forecasts looking dim. But you have to balance being candid with sowing widespread anxiety around the company.

If somebody comes to you, and asks you directly: "Am I going to get laid off?", what do you tell them?
CEO: If the answer is, "We don't know," that's the answer I would give them. But I don't think it's good to suggest something will happen that won't. Usually the answer is, "We are looking seriously at how to lower costs." The truth is that very rarely does this happen.

I'm surprised. It's like people are afraid to ask because they are afraid of the answer.
CEO: That dynamic came into play the day of. People were, at some level, expecting it. And therefore when the day finally came, people looked at is an opportunity to move on.

Coming up Thursday: A bustling green-tech industry readjusts its expectations