NET RESULTS:EVEN VICE suffers in a downturn. The crowds flooding the streets and casinos on the Las Vegas strip make it appear otherwise but, like people everywhere in the global economic downturn, they aren't spending like they'd normally spend on the tables and the one-armed bandits.
Here in the enormous, 3,000-room luxury Palazzo hotel - the recently completed sister hotel to the opulent Venetian next door - neither vice nor conventions are paying well at the moment.
Open less than a year, and the only truly elegant hotel in a sea of themed, tasteless (if amusing) super-casino overindulgence, the Palazzo, along with the Venetian and its Sands Expo and Convention Centre, is owned by the Las Vegas Sands Corp casino company.
Sands Corp is majority-owned by billionaire chief executive Sheldon Adelson. The company has undergone a total about-turn as the economy has soured. Shares last December went for $122 apiece. Now, a new public offering designed to raise badly-needed cash offered shares at just $5.50. Last weekend, they hovered at about $6.
Other Nevada casinos are being savaged too. Wynn, which has two enormous hotels featuring gold-tinted glass next door to the Palazzo, has seen its own shares plunge from $139 a year ago to about $45 last week.
Overall, gambling profits were down $58 million (€45.96 million), or 5.4 per cent, in September compared with the same period last year, settling at $1 billion.
So there is no doubt that the Palazzo was delighted to host 6,000 computer specialists this past week, here for four days for CA's (formerly Computer Associates) big CA World event.
The hotel is full of tech guys, and the occasional tech girl, in chinos and convention badges. They're interested in hearing how the last of the large, independent management software and solutions companies plans to weather the market and grow, following CA's rebirth after management scandals.
Former chief executive Sanjay Kumar, who was running the show the last time I attended a Las Vegas CA event, is now doing prison time as a result of financial shenanigans.
CA's current chief executive, John Swainson, arrived as a steady pair of hands and set to work pulling the company back from the brink, repairing it internally and externally. A couple of years later, he's just presided over eight consecutive profitable quarters, and CA remains both independent and viable. But, as he noted in his keynote talk on Sunday evening, times are very tough for both CA customers and the tech industry.
A report out this week from placement firm Challenger, Gray Christmas details just how tough things have become. Job cuts are rife, with losses of 140,422 jobs so far this year in the computer, electronics and telecommunicatons industry. This is one-third more than at this time last year, and the report predicts further storminess ahead.
"By the end of the year, we may also see cuts from Cisco Systems, Qualcomm and Nokia, all of whom are reporting falling sales amid the weakening economy," Challenger, Gray Christmas chief executive John Challenger said in a statement. "The tech sector is simply the latest victim in this downturn."
Well, you can already add in Sun Microsystems, which this week announced that 5,000 to 6,000 employees are to go.
In response to all this volatility, technology news site Techcrunch.com has even introduced a "layoff tracker", where you can see who is doing the laying off, the overall number of jobs gone, and the percentage of the workforce the layoff accounts for (www.techcrunch. com/layoffs). That's the kind of "feature" that hasn't been around since the demise of the dotcoms.
This is a far grimmer picture than the tech sector envisaged two months ago when I was last in Silicon Valley. Then, the papers and the analysts were full of general optimism for the industry, in what now appears to have been an obviously misplaced confidence that technology could fly above the turbulence.
At that time, the industry was putting forth the line that, in hard economic times, organisations tend to keep buying technology, because the increased efficiencies it can bring helps companies cut costs. Therefore, the tech sector believed it could hold steady and might even get a small bounce out of a downturn. But hardly anyone sees the current climate as simply a "downturn" anymore.
In Las Vegas, Swainson was using terms like "uncharted waters" to describe the state of the economy - hardly reassuring for the IT professionals roaming the convention centre, many of whom will have the survival of their own jobs at the back of their minds.
On the other hand, as with the dotcom crash, there is certainty that this will eventually end. Or, as Swainson noted during an interview: "This too will pass."
klillington@irish-times.ie
Blog: www.techno-culture.com
