News (I guess not unexpected) this morning is that Microsoft is cutting staff, Intel is closing down underutilized resources and cutting staff, IBM is cutting staff, and we heard yesterday from John at InsideHPC.com of more cuts at AMD.
Having been on the wrong end of RIFs before, I know what it is like. I empathize with those effected. Having run a company for 6+ years, I know the abject terror of the other side of this. It is very sobering. When credit is available, you can generally borrow to keep paying people to help ride out the economic soft spots. Credit is not available.
In all these cases, these companies have core businesses, and HPC programs or business units, or groups. None of these businesses have HPC as a core business. Which means that the magic words you need to be listening for are “focusing upon core business”. That could have some significant (negative) implications for HPC at these companies. I know of two of the list here where it already has.
Put another way, the accountants and management at each organization has to ask some very hard questions, such as if we invest $X in this group, will we get $X+$Y with $Y positive going forward, and how large is $Y as compared to $X? For companies developing product and looking to break into a market, $Y is negative. The rate at which you are spending $Y is your “burn rate”. Startups know this all too well. After $X is gone, you either need a new $X, profit from ongoing operations ($Y) to feed into $X (after taxes, costs, …). It usually takes a while to get the earnings ($Y) up to the same level as $X.
Read moreThe RIFs continue: now the bigger players in HPC