It's not only the dot-coms that are laying off thousands of professionals. Established technology companies such as Lucent, Nortel, and General Electric have also announced layoffs that total in the tens of thousands. Telecom companies have suffered greatly in the current economic conditions, but the pain has also spread to consumer electronics, manufacturing, software, and electronic components industries.
Engineers aren't immune from this round of layoffs. To conserve cash, technology companies have cancelled new projects and eliminated positions associated with those projects. Often, this means getting rid of the technical talent behind these projects.
For an engineer who may be satisfied with a comfortable and predictable career and lifestyle, the current economic uncertainty is causing concern. To be better informed, many of us seek out information from internal sources, the trade press, investment message boards, and other places to attempt to assess how our companies are doing.
Yet the quality of information from many of these sources is highly uneven, or even misleading. If you're attempting to assess the health of your company in de-termining your own future employment and advancement prospects, you have to know where to look, and how to evaluate the information you find.
It's easier to get such information on publicly held companies, whose finances tend to be more transparent because of financial disclosure laws. But even if you work for a privately held company, it's often possible to assess how well your company is doing. You can seek information from all of the following places.
Internal sources: There are a number of places within the company you can go to get information on how the business is progressing. However, you usually have to cultivate these internal sources over time. Declining business prospects are often reflected in sales, accounting, and manufacturing operations, so acquaintances in those areas are valuable information sources.
Changes in your benefits or working conditions could also be the result of slowing business. Longer purchase cycles for equipment, crowded office space, or a new health care provider could all mean that the company is tightening its belt. Even small things, such as the loss of free soda and snacks, or a change in the travel reimbursement policy, could be evidence of austerity. Seemingly small things, added up across a large company, can save millions of dollars.
Typically, it is possible to get a good impression of your company's financial health by simply walking the halls of the building and getting a feel for the level of activity in various departments. If there is bustling activity and a high level of energy, then people are confident of the future and are willing to help work to achieve it. If hallways and offices are quiet and people are subdued, then the majority of people have a cautious or even negative belief in the company's future prospects.
The press and industry analysts: Most technology companies periodically publish press releases, and company officials, senior executives, and product managers may talk to reporters in the trade press about the company's prospects, existing products, and product plans. Sometimes technology companies will also announce particularly large business deals or partnerships, and offer some level of financial gain in the deal.
For the most part, these releases represent the spin your management puts on the company's news. You can look for two different types of information in press releases—exaggeration and omission. If your company exaggerates a deal's size, or its impact on your business or position in the industry, your management could be trying to make a small event look much better than it really is. It also may omit negative information to convince outside interests that business is going well when in fact it's not.
Of course, this presumes that you have information on the actual events behind the press release. If you don't, seek out people in other departments who might have been working on the relevant projects, and get their opinion.
If you're a significant player in your industry, analysts from technology research firms such as the Gartner Group or Forrester Research may have information on your company, or on the industry in general. Most of these services cost money, but your company may already subscribe to them. And, analysts may be quoted in the trade press, which may also have other sources of information about your company.
Financial records: A publicly held company must file financial statements quarterly with the Securities and Exchange Commission (SEC). While it's possible for these filings to obscure details of the company's financial position, they must follow instructions that present enough information for you to assess the company's health.
SEC filings are made available to anyone through the EDGAR database, which you can access through Yahoo, other financial Web sites, or at www.edgar-online.com. These filings tend to be long and obtuse, but if you take the time to work your way through them, you might be surprised at how much you've learned about your company.
Sometimes a privately held company will also make available limited financial information, either to employees or to current and potential investors. Private companies seeking to go public almost always have audits conducted by accounting firms. While it's likely that you won't have access to the full audit, the company usually makes available some general statements made by the auditors.
Message boards: If your company is publicly held, it almost certainly has a message board available online, offered by the likes of Yahoo, Raging Bull, or other financial Web portals. These boards provide a means for stockholders, employees, and interested parties to anonymously exchange information, rumors, and gossip about the company. Even if your company isn't publicly held, there may well be complaint-oriented message boards for employees or customers at sites such as netslaves.com and workingwounded.com.
Participating in a message board as an employee during work hours is a bad idea; in some companies, doing so is a firing offense. Participating during your own time is permissible, but it should be done with caution, especially if you post inside information material to your company's prospects. You are usually required to give the message board administrators your true identity, so your company may be able to use legal means to determine your identity and file charges if they believe you're posting information not generally available to the public.
That being said, there are few restrictions on reading messages posted by others on the board, especially if you do so on your own time. Yet information on these boards range from accurate to trivial to completely false. A good practice in evaluating postings is to follow the most active posters to determine if they have consistent agendas, or if they appear to objectively offer and evaluate information without attempting to promote a biased viewpoint. These objective posters are the ones whose information is probably the most reliable. Ignore those that have an ax to grind or are clearly trying to manipulate the stock price without information.
How To Evaluate Your Information
Once you've gathered information, how do you evaluate it? Knowing something about how your business operates during normal times helps in this process. If your business is cyclical, the time of year may be important. If the company typically does a lot of business during the spring, for example, and the manufacturing plant no longer has a second shift operating this spring, then it's pretty clear that business isn't normal.
Sometimes manufacturing isn't the key operation to focus on. A friend who writes embedded code for machinery reported that his company's manufacturing operations were busy. However, the company was aggressively signing up international distributors who were required to accept a set number of machines. When distributors couldn't sell the machines, they came back to the factory, and there was an immediate slowdown in all aspects of the business.
This means that you can't rely on any one source of information for your assessment. Changes in a single policy, or a batch of negative comments on a message board, may simply mean that the company's management is at-tempting to change the business to adapt to new opportunities. But if many of these indicators are negative, it probably signals that finances aren't favorable, and layoffs may follow.
If you conclude that your company's prospects aren't good, that doesn't necessarily mean that your own job is at risk. Your project may be an ongoing cash cow for the company, or the executives may consider it the best hope for future prospects. Every company keeps a core group of professionals that are needed in order to get moving forward again once business improves, and you may be a part of that group.
But layoffs are notorious for not following logical thought processes. Over the last decade, they've struck young and old, novice and experienced, entry level and highly paid, seemingly indiscriminately. Sometimes corporate-level staff members are let go. In other cases, line employees are released.
In times like these, you should update your resume, think seriously about what direction you might want to take with your life, and be emotionally and practically ready for some changes. Even if your job survives the latest technology employment downturn (and the vast majority will do so), this may be your best opportunity to take a chance and try the career change you've always dreamed about. And as in all of the previous technology downturns, things will get better sooner or later.