Current Economic Status and Myths
I wanted to respond to a number of recent requests on the state of our business in the analog/mixed signal community in light of all the negative press and current economic crisis. I don't want to sound like a pie-in the-sky optimist. Obviously we have all heard about, or read about some recent layoffs. This consists of both large and small companies. Certainly there has been a barrage of bad news throughout the media about the state of global recession and slowdown. While many think it crosses all industries within electronics, I have not seen a dramatic effect to date in our space. Yes we have seen a small amount of layoffs from some the start-up companies who are trying to reduce their cash burn rates to preserve capital. The problem with this trend is that time is of the essence for most start-ups. Most run quite lean anyway, and by reducing people I can';t see how this will help them reach success. You could certainly understand perhaps a small reduction for performance issues, or a change in strategy, which might facilitate a need for different skill sets. This has been primarily due to the lack of interest in the VC community right now to invest in our space. Yes, getting a Series A round of funding is most likely impossible, but I believe this is temporary and will return after the new year. We have seen a number of start-ups receive B,C and later rounds recently. We have also seen a couple who have had great difficulty. The M&A activity has however picked up recently because of the perceived bargains. VC funding is down in every industry right now as the credit crisis has manifested itself.
I have spoken to several CEO's and senior executives in the last month with larger private and public companies and most have said their business has held up pretty well overall. Most have fairly large cash positions! This has allowed them to buy back their stock at very low levels. Despite the funding challenges, all have reported that they are looking at acquisitions as well due to the reduced valuations. All have indicated that current economic time is nowhere near the downturns of 2001 and 2003. Also, most indicated that there is a shortage of inventory now,which will help going forward. We have many recruiting assignments right now so this confirms that the industry is still moving in a positive direction. The global market obviously helps in the sheer number of consumers versus 2001 and earlier recessions.
Make no mistake about one thing, All of the disciplines in our space with their six figure incomes, represent fine careers and incomes. Job stability overall is more geared to one's strengths and accomplishments than to this current economy. I know the few who have been layed off probably are quite worried. Most will find new opportunities if they are flexible on a few points.
I look forward to doing a yearly update soon on the state of the analog/ mixed signal world as well as my annual column in Jan/Feb. Stay tuned!
