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Who Needs a Desk Phone?

Are companies ready to cut the cord? A forecast by research firm Gartner (IT) suggests that more businesses could soon join the many households that have unplugged from their landlines to go mobile-only. Gartner predicts that by 2012 about 23% of North American businesses will be doing without desk phones—up from 4% in 2008.

At the forefront of this trend are outfits like San Jose Web design firm Yogirt. Co-founder Brian Yoshida didn't even bother with desk phones when he set up the company five years ago. Wireless-only is "the future," he says.

That's music to the ears of makers of so-called smartphones—including Research in Motion (RIM), Nokia (NOK), and Acer. In their pitches to corporate clients, they emphasize the cost savings that come with switching to mobile.

Initially installing one desk phone can cost up to $500, and the monthly per-line fee must be paid even if an employee is rarely in the office. For cell phones the average initial cost per employee is about $200, plus monthly charges. Given companies' concerns about controlling employees' cell-phone usage, however, most businesses are likely to buy mobiles but link them to their phone networks.

That's what CIO Tim Campos opted for when he was faced with the need to upgrade his phone system at KLA-Tencor (KLAC), which makes semiconductor inspection tools. The company, based in Milpitas, Calif., spent about $8,000 to install RIM's Mobile Voice System, which routes employees' BlackBerry calls through the corporate landline. Employees get a single number for both desk and mobile phones, with the mobiles getting the company's long-distance rate. (No roaming charges.) "You get the best of both worlds," says Campos, who plans to roll out the BlackBerrys to 3,000 U.S. employees in the next year. The system will cost about half the $400 per employee the company would have spent to upgrade its desk phones, he says.

A Pink-Slip Pandemic

The dismal jobs outlook is only going to get drearier worldwide, suggests a new study by Bain & Co. The consulting firm's latest biannual Management Tools & Trends survey found that of 1,430 managers polled globally, 59% plan layoffs in 2009. Some 34% said they had already made job cuts in 2008.

North America has the highest share of companies planning layoffs (70%). But the pain in 2009 may be greatest in Europe (60%), Asia (61%), and Latin America (52%), where there is a bigger year-over-year rise in planned staff reductions. Only 35% of Asian managers in the survey cut jobs last year.

What's especially worrisome, says Darrell Rigby, the Bain partner who headed the study: Of the executives around the world who downsized in 2008, some 88% plan more cuts this year. "We know from previous downturns that companies that have to do multiple layoffs do not get helped by the stock market and tend to lose the focus of their employees," he says, adding that workers just keep "waiting for the next round."


Steve Ballmer, Power Forward
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