What’s New This Quarter
While blockbuster deals can seem all too common in Silicon Valley these days, Facebook’s January acquisition of text messaging service WhatsApp for a staggering $19 billion turned many of the region’s heads, with some experts contending that the company was actually worth even more. In late March, Facebook followed up the deal with the purchase of Kickstarter darling Oculus Rift for $2 billion, turning even more heads.
Then there’s action camera maker GoPro, which is testing the waters for an IPO that could value the company at more than $2.25 billion. Because it has less than $1 billion in revenues, GoPro can test the IPO waters in a confidential filing before disclosing its financial details.
Over at Google, the company’s growth equity investment wing, Google Capital, said it has made three investments and has $300 million to work with. It invested $40 million into Renaissance Learning, a Wisconsin education software company, and over the past year also took stakes in SurveyMonkey and LendingClub.
Meanwhile, HP had some good news. The beleaguered giant scored an 8 percent jump in enterprise sales in its most recent earnings period, leading to an overall revenue increase of 4 percent. The uptick leads observers to believe that CEO Meg Whitman may decide to hold onto the Personal Systems division for a bit longer, even if “the death of the desktop” is truly here.
On the Other Hand…
In less optimistic news, Zynga said it will cut 15 percent of its workforce and buy mobile game company NaturalMotion for $527 million in cash and equity. The company made the announcement after posting a better-than-expected fourth quarter loss. The San Francisco game company is attempting a turnaround under a new CEO, and part of the plan involves eliminating 314 jobs to save up to $35 million this year.
And EMC Corp. has approved a restructuring plan that will result in layoffs. They will be “roughly similar in size” to past layoff rounds, EMC said in a statement, which could mean about 1,000 jobs lost nationwide. The company has a presence in Santa Clara.
Adobe Systems is also conducting a small layoff, saying goodbye to 46 workers in San Jose and another 25 in San Francisco, according to a state filing. These come on the heels of an earlier layoff, during which the firm let go 30 workers in San Jose and 17 in San Francisco.
Skills in Demand
Despite the layoffs, “The employment climate for IT is very strong right now,” says Kathryn Krueger, San Jose managing director for recruiting firm Randstad Technologies. “In Silicon Valley specifically, there are a higher number of IT positions than in other markets. Employers are losing great candidates to their competitors because employees are in such high demand with most, if not all, of them receiving multiple offers.”
It’s worth noting that hiring here tends to have seasonal quirks. “At the start of the year we tend to see a lot of application development/Web development projects kick off, so the demand for developers is higher early in the year,” explains Krueger. “As we move toward the middle of the year, we are seeing a heavy focus on development and operational engineers with strong virtualization and scripting experience. All candidates with cloud and SaaS experience are hot commodities.”
“IT professionals with specialized skills like Java, .NET, PHP, and Linux are in high demand, and candidate shortages persist,” says David Knapp, metro market manager for recruiting firm Robert Half Technology. “Companies need to move quickly and make competitive offers to hire top performers or they risk losing these candidates to other organizations.”
“The virtualization and cloud industries have been especially bright spots here in the Bay Area,” Krueger adds. “Large enterprise companies such as healthcare providers, financial services organizations and telecommunications providers are investing in virtualizing their infrastructure and making it more robust.”
According to the 2014-2013 Dice Salary Survey, the average salary for a Silicon Valley-based IT professional is the nation’s highest at $108,603, up 7.2 percent from the previous year and 23.6 percent above the national average tech salary of $87,811.
Robert Half Technology reports that 20 percent of Bay Area technology executives expect to hire during this year’s first half, while 68 percent expect to expand their IT teams or fill vacant slots. At the same time, 91 percent of Bay Area CIOs were optimistic about their companies’ prospects for growth during 2014’s first six months.
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