Overhead Declines: Tech Industry Looks Healthier
The high-tech industry continues to show signs of improved health. After several years of declining revenues and disproportionate expenses, recent financial results show overhead coming back in line, according to a recent study of the leading high-tech companies by Culpepper and Associates.
(PRWEB) January 16, 2004
The high-tech industry continues to show signs of improved health. After several years of declining revenues and disproportionate expenses, recent financial results show overhead coming back in line, according to a recent study of the leading high-tech companies by Culpepper and Associates.
Hit the hardest during the tech industry downturn, IT Services firms made significant progress towards reducing overhead. SG&A expenses as a percentage of revenue declined 1.1 percentage points. SG&A expenses per employee dropped 8.6% along with a 3.5% reduction in total headcount.
Hardware companies also show evidence of better cost control. SG&A expenses as a percentage of revenue declined 2.3 percentage points. SG&A expenses per employee dropped 1.8%.
Software companies experienced a small decline in G&A expenses as a percentage of revenue. While showing a 2% growth in headcount, software companies kept expenses under control and did not increase G&A expenses per employee.
Semiconductor firms, show a slight decrease in SG&A expenses as a percentage of revenue. However, SG&A expenses per employee increased by 4.6%, with total headcount only growing by 1.2%.
Overall, these results reflect an industry returning to a better balance of expenses and revenues. Declining expenses, along with recent reports of revenue growth, give us renewed optimism for a healthy tech industry in 2004.
