Monday, February 23, 2009 

2008 Year End Review and 2009 Outlook





2008 Year End Review and 2009 Outlook Well for many the end of 2008 was great news! Looking forward to 2009 for signs of optimism and a return to better times might prove to be a little challenging. In all reality, most of 2008 was pretty good in terms of business and the job market. The real problems began to surface post labor day and certainly began to deteriorate rapidly after Thanksgiving. Venture funding showed signs of slowing in the last half of the year as the financial market began its historic meltdown. The number of IPO’s in our space in 2008 was non-existent. Cavium, Avago and Magnachip all filed and withdrew. The M&A market was off as well yet there were a few finalized in the last quarter with Intersil claiming three in D2 Audio, Kenet and Zilker Labs. The valuations were definitely deeply affected in both forms of exits. One interesting casualty of the last 6 months is the collapse in the wireless segment in our space. Finding funding and modest M&A valuations was very challenging. A few large companies like TI, were unable to find buyers for their wireless businesses and have shelved the sale for the time being. The hot specialties in 2008 in hiring were for Power Management, Mixed Signal, MEMS and Data conversion. 2009 has begun with mass layoffs from large, medium and small VC funded firms. This will have significant impact and ripple effects that are yet to be fully determined. One of the most critical problems is to make sure the downsizing does not cause the firm to lose its competitive advantages. Sometimes a focus on short term execution can cause companies to forgo the investments in people that are required to sustain their strategic advantages. In other words when sales slow and profits decline companies often focus on efforts that involve cost savings and efficiency, rather than the bigger picture! I remember writing in a previous column the realization that one day your phone may stop ringing off the hook from recruiters. Well, that day has arrived and as I also mentioned this does spell a big problem for all from Executive to the recent grad. At Analog Solutions in 2009 we are running at about a 40-50% of our typical workload. My limited visibility in the semiconductor space leaves me with a leapfrog opportunity to diversify, and continue a trend that we began in 2008: Alternative Energy, MEMS & Sensors, Medical Device and Nanotechnology. I expect this will be positive for not only us but our clients and candidates as well. Another interesting dilemma is the H1-B visa pool. For those on H1-B’s currently, and have found themselves laid off, most will be required to return home. Finding positions back home most likely will present some challenges as well. Looking forward in 2009 on a more positive note some company executives and BOD’s will seize the tremendous opportunity to upgrade their staffs and teams. Many firms who decide to take advantage of this strategy will be able to recruit talent that wouldn’t have been possible for them a brief 4-6 months ago. I would expect an increase in M&A activity in 2009 as public companies and medium size private firms look for opportunities to position for growth now and in the future. As such I have become a partner of small M&A firm to help facilitate this activity with clients in our space. 2009 Recommendations For those displaced in the recent wave of layoffs I want to offer some guidance going forward which may prove helpful in getting thru this difficult time. The entire theme remains consistent. You must in addition to seeking a new position full time, continue to seek ways to improve your skills and capabilities. This applies to those who still have positions as well. Executives who find themselves unemployed should use their network to help their colleagues, former competitors, etc find solutions to managing their business in these challenging times. This will serve two purposes. The displaced executive can stay just as sharp as if they were still employed. Being unemployed does not mean being incapable of managing change, and solving problems. On the contrary, companies that seek help from their displaced friends, colleagues, etc can gain benefits thru accessing this highly talented pool. On the engineering side, you should find ways to become stronger engineers. Reviewing fundamentals, taking classes, attending conferences can all have a positive effect, and in addition, make you more marketable in the job market now and into the future. Sales and Marketing professionals should continue to research the markets they have served and stay in touch with their entire network and customer contacts. These relationships will most definitely help going forward. Remember, YOU are your best champion! Candidates whether active, inactive or who are passively seeking new opportunities should continue to review their previous accomplishments and keep an accurate record. These are the key criteria for which you will be judged by current and future employers. I would also recommend all job seekers review my ”Interviewing Tips” section of our website at: www.analogsolutions.com. You will find them under the candidate section. I have also written previous columns on why smart people sometimes fail in interviews. All of my articles can be found on the PlanetAnalog site by simply searching my name or following the columns archive on page one of the site through Bill Schweber’s weekly Column. Finally, I want to thank all of my readers, and Bill Schweber as well that through your continued interest in my articles you have helped establish my column consistently as one of PlanetAnalog’s most visited pages. As I have said in the past, if there are topics of interest share your feedback so I can continue to deliver content that is off interest to all. I wish everyone the very best in 2009 and remember the sun will shine after every storm!

Stay tuned!