Silicon Valley, the technology mecca once considered immune to fallout from the global financial meltdown, now faces the biggest cutbacks since the dot-com crash.
“Lots of my friends have been laid off,” Peter Raulwing, a project manager for Microsoft Corp., said during lunch at a Starbucks in Palo Alto, California. “I absolutely watch what I spend. I feel lucky I’ve survived, but you never really know.”
He has reason for concern. Global spending on computers and software will slide 8 percent next year in the U.S., Western Europe and Japan, according to Goldman Sachs Group Inc. With a 7 percent unemployment rate, Silicon Valley has about 4,000 fewer jobs today than this time last year, the Center for the Continuing Study of the California Economy said last week.
Technology companies with headquarters in Silicon Valley -- a corridor of office parks stretching between San Francisco and San Jose -- have announced at least 38,000 job cuts since September. Hewlett-Packard Co., Yahoo! Inc., Adobe Systems Inc., Sun Microsystems Inc. and Palm Inc. are among the firms paring their workforces.
The region will probably feel more pain starting next month, said Madeline McMenamin, a senior consultant for workforce consulting firm Watson Wyatt Worldwide Inc.
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