The bad news that has dominated the semiconductor industry lately has been good news for Caroline Altman, director of re cruiting at International Rectifier in El Segundo: She is hiring laid-off engineers as fast as she can find them.
“We’re taking advantage of the recession up north,” Altman says, referring to the massive layoffs at such Silicon Valley chip makers as Intel and National Semiconductor. “They’re laying off the meat of their operations--some very good people.”
International Rectifier makes a specialized type of semiconductor that is in such strong demand that the company is building a second plant, near Riverside, to boost production. It will hire 700 people over the next year, increasing the firm’s total employment by 60%.
The experience at International Rectifier provides a counterpoint to the recent malaise in high technology and supports the widespread contention in the industry that the supply of jobs in computer-related fields will continue to be abundant, if volatile, for the foreseeable future.
For now, programmers, engineers, technicians and computer scientists will probably have to keep their bags packed so they can be ready to jump from a floundering company. But much of the high-tech work force has always been transient--and readily lands on its feet as employers’ fortunes rise and fall.
Marvin Hoffman, president of XXCAL in Los Angeles, which he describes as a “Kelly Girls” supplier of computer programmers, draws on a data base of 14,000 programmers available for temporary work. It’s the sort of work that often thrives in the early stages of a recession, because such free-lancers can perform necessary work but spare employers the costs of employee fringe benefits.
Hoffman says the industry downturn isn’t nearly as severe as that of 1980-81 because it is confined to certain segments, such as personal computers.
And the shakeout in computers, semiconductors and related fields is viewed as an essential regrouping before more rational growth can take place and high-tech employment can become less chancy.
“The shakeout will just make for a stronger industry,” says Robert A. Kleist, president and chief executive of Printronix, an Irvine company that makes matrix and laser printers for use with computers.
Kleist knows all about the shakeout. His firm’s experience speaks the hard truth: For tens of thousands of employees in high-tech fields, it has not been a good year.
As sales of computers fell below expectations and foreign competition intensified, Printronix saw demand for its printers drop. It slashed employment by 25% and exported some manufacturing jobs to plants in Singapore and Hong Kong. About half the company’s remaining 1,800 employees are in Southern California.
Printronix mirrors what happened in Southern California and other centers of technology-based employment. In fast-growing Orange County, where the aerospace boom has helped keep the unemployment rate in the paltry 4% range, jobs in computer manufacturing have actually declined over the past 12 months by 2,000, or 13%.
“I can tell my projections for 1985 were overly optimistic,” says Alta Yetter, labor market analyst in Orange County for the state Economic Development Department.
The health of high-technology industries is critical for California’s economy, not to mention for the country’s international competitiveness. The state is far and away the biggest center of U.S. electronics and information-technology employment, with about 592,000 people--or about one-fourth of all electronics workers.
Often forgotten in the concern over layoffs and plant closings is that overall growth continues in high technology. The scattered, severe cutbacks resulted when growth didn’t match the industry’s unrealistic expectations, and production capacity that had been put in place had to be quickly dismantled to avert financial crises.
This year, U.S. sales of all computers and related equipment are expected to increase about 11%, to nearly $102 billion, from 1984 levels, according to the Computer and Business Equipment Assn. Even in personal computers, where bankruptcies and plant closings are routine these days, the industry is expected to sell 12% more machines this year than it did in 1984. But a year earlier, the leap was 38%.
National employment in electronics industries actually fell by 20,000 jobs, to 2.57 million, in the first four months of this year. But that was the first such decline during the long slump, which is now thought to have bottomed out, and employment as of April still exceeded year-earlier employment by 4.5%.
In Southern California, moreover, high-tech industry is more diverse than in the Silicon Valley near San Jose and some other high-tech centers. That diversity, and the concentration here of the booming aerospace and defense industries, cushion the slump and make for a highly attractive job market in electronic and computer-related fields.
The American Electronics Assn. of Palo Alto projects an annual growth rate of 14% in technical employment in California through 1987, including 11% in Los Angeles, 13% in Orange County, 14% in San Diego and 15% in Santa Barbara and San Francisco.
One hot niche at the moment in high technology is artificial intelligence, the leading edge of computer science, which is just now becoming commercially viable. At a recent UCLA conference, entrepreneurs complained that they couldn’t find enough qualified people to develop artificial-intelligence products. And academics say the flight of such students from graduate school to industry threatens basic research in the field.
Another need cited by numerous executives is for people technically qualified to sell high-tech products. One study cited technical sales people as the second-fastest-growing category of any occupation, behind secretaries. Anywhere from 170,000 to 230,000 such high-tech peddlers will be needed in the next decade, concluded the study, sponsored by the DeVRY Institute of Technology in the city of Industry.
By far the fastest growth in demand will continue to be for computer analysts and programmers and electronic and software engineers, with annual growth of about 20% in each category.