U.S. tech wreck spreads to Europe with wave of layoffs, earnings gloom

After savaging American bellwethers Cisco, Hewlett-Packard and Intel, market forces are now taking aim at Europe, as the continent's high-tech sector cracks under the pressure of plunging profits and wilting demand. Europe now appears on a collision course with an unfolding global tech wreck. And the spreading gloom is sapping confidence in a regional economy that had until recently boasted immunity from the U.S. slowdown. Things unraveled this week, when Dutch electronics giant Philips posted a 90 percent drop in quarterly profits and said it would layoff up to 7,000 workers. Philips placed the blame squarely on the slower U.S. economy, saying it had to scale back production to cut inventory. That follows 2,000 job cuts by Germany's Siemens and reports that British telecom equipment maker Marconi PLC is gearing up for 3,000 layoffs of its own. Swedish mobile phone giant Ericsson saw its shares drop this week on reports that it was planning to slash its work force by as many as 30,000 people. Many analysts expect more fireworks when Ericsson and rival Nokia release earnings Friday. The snowballing trend builds on recent layoff announcements at Cisco and Hewlett-Packard and an 82 percent plunge in first-quarter profit at Intel, the world's leading microchip maker.In Europe, market growth for those products is expected to fall to 8.9 percent next year after peaking at 13.3 percent in 2000, according to the European Information Technology Observatory.