What do Pelco's Layoffs Say About the Industry?

Author: John Honovich, Published on Jan 13, 2010

IP Video Market poll respondents are divided among 3 conflicting interpretations about Pelco's 4% layoff.

 

  • 45% - the entire industry faces economic challenges
  • 32% - the analog incumbents face economic challenges
  • 22% - this is primarily a Pelco problem

Of these, we believe that the least likely interpretation is that this is primarily a Pelco problem. 4% layoffs have been fairly common over the last year, especially for incumbents. Only March Networks layoffs have been publicly announced early in 2009. The dozens of others have been done privately. Secondly, as we examine in our public traded financial results, many, if not most of the incumbents have been suffering from revenue declines.

We also think it's clear that layoffs are more of a problem for analog incumbents than IP providers - simply because while both sectors have been hit, most IP providers are still growing (though many at a slow pace).

We do think the Pelco layoffs are a sign that 2010 will not be robust overall for the industry. We continue to hear many private companies 'restructuring'. The Pelco announcement is a visible confirmation of a general trend we see in private smaller companies.

 

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