So here’s the headline “Crisis Spreads to Tech Sector as Sun Plans to Cut Work Force.” The gist:
Before the stock market opened Friday, Sun disclosed that it will layoff 5,000 to 6,000 workers or 15 percent to 18 percent of its work force. The company, already dealing with layoffs announced in May, expects to save $700 million to $800 million a year as a result of the moves, while also taking up to $600 million in charges in the next 12 months.
There are economic realities and then there is human nature. The two are very closely intertwined. If I think I’m going to lose my job I won’t spend money. The effect: the stores where I would typically shop feel a pinch as they lose a shopper. Multiply that scenario by a few million people and you have an economic problem.
Here’s the non-economic reality. Sun was troubled long before word of an economic crisis spread. Their business model is in trouble. Years ago Java was the future now it’s a nuisance. Then their hail mary pass was cloud storage. It failed to turn their business around. Now they own MYSQL which is, by the way, free. So today they report job losses as they try to find their way.
What the headline should say: “A fledgling tech company is coming to pieces.” Give it a rest media. If you keep putting doomsday scenarios above the fold we’re never going to get out of this mess. Consumer spending accounts for nearly 70% of our economy.
Scare everyone to death and we may never get out of it, but hey, you might sell some papers
