Tech Stocks Remain Relatively Flat

Tech stocks continued to hold their own even as the economy continues to falter and shed jobs at an alarming rate. As of Jan. 23, more than 60,000 tech jobs have been cut or slated for elimination since the beginning of the year. Overall, more than 81,000 layoffs were announced by major companies since Jan. 1.

The last two weeks of January is the time for Q4 and year-end earnings releases many of which are including record losses, Q1 guidance and/or proposed layoffs. A few highlights from last week’s earnings included the following:

Google (NASDAQ: GOOG) beat street expectations with revenue of $5.7 billion for the quarter ending December 31. The revenue was 18 percent more than the same quarter last year.

“Search query growth was strong, revenues were up in most verticals, and we successfully contained costs,” said Google CEO Eric Schmidt. “It's unclear how long the global downturn will last, but our focus remains on the long term, and we'll continue to invest in Google's core search and ads business as well as in strategic growth areas such as display, mobile and enterprise.”

While Google has announced layoffs in their recruiting division, its working on retention for other areas of the company. The company announced Monday that will offer employees a voluntary, one-for-one stock option exchange, which is intended as an incentives for employees to remain at Google and contribute to achieving its business objectives.

Microsoft (NASDAQ: MSFT) announced the reduction of 5,000 jobs over the next 18 months. While a significant number of jobs, the announcement ended months of rumors that the leading software company would eliminate more than 15,000 jobs. The company also stated that for the period ended Dec. 31, its profit was $4.17 billion, an 11 percent drop, compared with $4.71 billion, a year earlier. Gross revenue rose 1.6 percent to $16.63 billion.

“While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach,” said Microsoft CEO Steve Ballmer. “We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today.”

IBM (NYSE: IBM) was optimistic about future earnings. "With our strong financial position, solid recurring revenue and profit streams and global reach, we are confident about 2009 and, based on our 2008 performance, we are ahead of pace on our roadmap for $10 to $11 per share." said Samuel J. Palmisano, IBM’s chairman, president and chief executive officer.

IBM exceeded analyst estimates when it reported a 12 percent increase in fourth quarter net income.

Not missing out on the layoffs, IBM cut 1,400 sales positions last week according to Bloomberg. They cite their source as a copy of a Jan. 21 separation agreement sent by Lee Conrad, national coordinator for the Alliance for IBM. The organization, which is seeking union recognition at IBM, said similar cuts probably were made at the company’s software unit.
 
Overall, stocks tracked by Channel Insider were flat week over week.