Avery Schumer
All posts from Avery Schumer
Avery Schumer in Sector Report,

Top Analyst Predicts Almost 400 Thousand Tech Layoffs in the Next Year

The latest guidance cut from Juniper Networks, Inc.  is a warning for the employees of tech sector, as Global Equities Trip Chowdhry predicts the sector would layoff 369,000 employees over the next 12 months or so, and Juniper could layoff 3,500 employees.

"Layoffs at the technology companies is picking up. Over the next 12 months, technology sector alone will layoff about 369,000 employees. The Fed does not have a handle on the unemployment situation," Chowdhry wrote in a note.

Chowdhry attributed his estimated 369,000 layoffs to technology shift to cloud native and mobile native applications.

"Cloud and mobile technologies have increased the productivity of an employee exponentially. Hence, the number of employees needed to do a certain type of job is less," Chowdhry noted.

He highlighted, "Cloud Services from Amazon.com AWS and Microsoft Azure provides 100x performance at 1/10th the cost. The software can run on a fraction of the hardware, than that was previously needed by a customer."

Meanwhile, Chowdhry elaborated "integrating technology is no longer needed. Under the old world, one company would make the servers, another company would make the network, and another company would make the Apps, and still another company will make all these work together ... and this old­world of on­premises heavy technology, is fast coming to an end, in favor of on premises light and cloud heavy form of computing."

"Because of this technology shift, people who configure the middleware, or work on databases, manage and integrate backend processes are losing their jobs. 70% of the current work which requires back expertise, products and services is going to get reduced to 30%," the analyst added.

Chowdhry estimates the following companies would layoff a total of 369,00 employees over the next 12 months:

  • EMC Corporation EMC: Total Employees 70,000: about 40 percent layoffs = about 28,000
  • VMware, Inc. VMW: Total Employees 17,000: 30 percent layoffs = about 5,100
  • Hewlett Packard Enterprise Co HPE: Total Employees 240,000: about 30 percent layoffs = about 72,000
  • HP Inc HPQ: Total Employees 47,000: about 30 percent layoffs = about 14,000
  • International Business Machines Corp. IBM: Total Employees 379,000: about 40 percent layoffs = about 150,000
  • Cisco Systems, Inc. CSCO: Total Employees 72,000: about 40 percent layoffs = about 28,000
  • Juniper Networks, Inc. JNPR: Total Employees 8,800: about 40 percent layoffs = about 3,500
  • Oracle Corporation ORCL: Total Employees 132,000: about 25 percent layoffs = about 33,000
  • Microsoft Corporation MSFT: Total Employees 118,000: about 20 percent layoffs = about 23,000
  • NetApp Inc. NTAP: Total Employees 12,800: about 25 percent layoffs= about 3,200
  • Symantec Corporation SYMC: Total Employees 19,000: about 25 percent layoffs = about 4,750
  • F5 Networks, Inc. FFIV: Total Employees 4,500: about 25 percent layoffs = about 1,125
  • Yahoo! Inc. YHOO: Total Employees 12,500: about 50 percent layoffs = about 6,250
  • Yelp Inc YELP: Total Employees 3,671: about 50 percent layoffs = about 1,800

According to TipRanks, Chowdhry is ranked 133 out of 3,857 analysts. He has a success rate of 73 percent with an average return per recommendation of +19.3 percent.

via www.benzinga.com