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Tech Sector Chops Some Jobs: Economy ? Overall, the Industry in Utah Remains Resilient.
Thursday, April 30, 2009 1:57 PM


(Source: The Salt Lake Tribune)trackingBy Tom Harvey, The Salt Lake Tribune

Apr. 30--Economic strains may finally be showing in some parts of Utah's high-flying tech sector.

A key area of growth in Utah's economy in recent years, several computer software-related companies have engaged in a spate of layoffs. But the sector as a whole seems healthy, despite the deepening recession now more than a year old.

OrangeSoda, a fast-growing American Fork company that helps small and midsized businesses drive potential customers to their Web sites, said Wednesday it had laid off 13 percent of its staff of 224. Other recent layoffs have included Move Networks of American Fork, Orem-based iMergent, Digital Technologies International of Springville and Novell of Provo.

Jay Bean, OrangeSoda chairman and CEO, said the layoffs of 15 part-time and 15 full-time people were tied not only to the economy, but also to improvements in the company's software that makes its workers more efficient. The 2 1/2-year-old company continues to grow rapidly, but wants to be careful how it uses investors' money in the slowing economy, he said.

"We have to be aware of our surroundings and where we are at, because we don't know when the economy will come back in a way we'd all like," said Bean. "That's one of the factors and one of the reasons we did this, because we want to play it safe, too."

At Digital Technologies International, Vice President for Marketing Steve Nilan confirmed the layoffs, but wouldn't say how many or where, nor disclose how

many people work for the privately held company that sells publishing systems to newspapers, magazines and others companies.

"We're doing the prudent things to run a profitable business," said Nilan. "We've taken steps to ensure our profitability this year and beyond."

Overall, however, Utah's high-tech sector appears to be resilient.

Richard Nelson, CEO of the Utah Technology Council, the trade group representing the state's more than 5,000 high-tech companies and their 58,000 or so employees, pointed to informal surveys of executives taken recent council-sponsored events. At one, participants were asked if their businesses were thriving, growing, level or declining.

"With over 40 CEOs there, 25 percent said 'thriving,' 55 percent -- over half-- said 'growing.' The rest said 'level' sales. Then I asked how many were declining. Not one hand went up."

Another survey showed 80 percent were thriving or growing, he said.

"We continue to hold our own as an industry," said Nelson, while acknowledging that startup companies struggling with profitability may be facing pressures to cut costs from venture capitalists or other investors.




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