© marcin kempski General | March 27, 2015

Who's running this ship?

2015 has already made a bang, almost four months in and we've already seen big companies make big cuts. Are we looking at yet another bad year?
Since the beginning of the year I've written eight articles concerning layoffs. Collectively these articles concern roughly 15'000 people (which really is more as some stories only include percentages), and you can imagine the amount of layoff-related stories which I haven't covered.

And adding to this; we saw a steady news feed of companies restructuring, downsizing and reducing headcount during the second half of 2014.

For instance, AMD issued a restructuring plan in October stating it would reduce its headcount by 7 percent. Microsoft's handset division – previously Nokia Devices and Services – saw a workforce reduction of of 12'500 employees heading its way, as part of the company’s plan to reduce the size of its overall workforce by up to 18'000.

Cisco Systems was feeling the uncertainties of the market and in an attempt to reduce costs, the company reduced its staff with 6'000 employees in August of 2014.

And then we have HP's multiyear layoff, which just seems to increase over time.

But that's the past... right? There should be a brighter future ahead. Well, reading some analyst reports on the EMS and PCB markets for 2015, we might get a feel for where the year is heading.

According to Peter Brent from Reed Electronics Research, the EMS market will experience a cautious start with limited visibility in the short term on the back of continued uncertainties in the Eurozone and slower growth in the emerging markets.

We can also expect further consolidation of the European EMS companies as some are unable to react to the pressure of static prices and the need to offer a broader line of services, which could possibly result in uncertainties.

However, going through the fiscal reports from the EMS industry, many companies seem to have a rather positive outlook on the new year.

The PCB industry on the other hand is tough to read at the moment. The European PCB industry is doing well, but in a comparison to early 2014 it's not (however, it's worth mentioning that the industry did extremely well during that time).

However, there is a couple of thing which are really speaking for the PCB market. The prices of bulk commodities (particularly the copper price) plummet, which will greatly reduce the raw material costs of PCB companies and help raise their profitability, as stated by Research in China.

Research in China also mentions the increase in demand for larger screens for mobile phones, which in turn requires larger FPCB. The FPCB market is expected to grow 8.6% in 2015 as the smartphone market can not continue its rapid growth and the tablet PC is in recession.

Conclusion – We're not worse off then last year, but last year wasn't really wasn't the best of the best either. So as long as the wind keeps – or picks up – we stay on course, but if we hit bad weather, we might loose a few good men.

What's your take on the situation?
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