Southern California Job Market : Challenges / Opportunities : Can High Tech Absorb Layoffs in Aerospace? : Many employers are happily tapping the talent pool. But it may simply be too large.
Politicians and pundits have been expressing the hope that large numbers of the Southland’s technically skilled aerospace employees will find a niche in high technology. While high-tech employers say they are happy to tap the technical talent of the region’s laid-off defense workers, they admit that they cannot assume the entire burden of finding jobs for the rising numbers of displaced employees.
In fact, although the Southland’s high-tech employers are not making headlines with reports of big layoffs--as are their counterparts in Silicon Valley--they are beginning to see a slowdown after years of rapid growth.
“The joy ride is over in electronics in terms of double-digit growth year after year,” said Richard Bruins, director of economics at Pacific Bell in San Francisco. “High tech can absorb some defense layoffs, some people will move out of the state, and some people will have to change their jobs altogether.”
“I don’t think our industry could absorb all the defense layoffs,” said Howard Derman, director of human resources for AST Research Inc., a computer manufacturer in Irvine with 1,100 employees in Orange County. “But there’s no question that some engineers affected by the layoffs possess skills that would make us consider them seriously for positions.”
High-tech industries account for roughly 7% of all jobs in Los Angeles and Orange counties, compared to about 30% in Santa Clara County, the heart of Silicon Valley, according to the state Employment Development Department. But unlike Silicon Valley, Southern California’s high-tech sector depends less on chip manufacturing and more on military and aerospace applications.
Throughout California, employment will decline in most sectors within high tech during 1990 and 1991, according to just-released projections by the UCLA Business Forecast for California. Southern California will mirror that trend. The statewide industry is not losing jobs as quickly as the aerospace/defense sector, but high-tech industries will lose 1% to 4% of their jobs during 1990 and 1991, according to the forecast.
The hiring that is occurring generally seems to involve at most a few hundred people at scattered companies. For example, Jet Propulsion Laboratory in Pasadena could absorb a small part of the layoffs with plans add up to 600 engineers and aerospace designers to its staff of 7,000 by the end of 1991. But the hiring is contingent on congressional approval of two new NASA satellite probes.
And Los Angeles-based Teradata Corp., a supplier of database software and systems, will add about 300 people in the next year to its staff of 1,500 employees, 1,000 of whom are in the Los Angeles area. About 80% of the job-seekers interviewing with the company come from defense and aerospace firms.
While revenue in the electronics manufacturing industry is rising, employment in that sector is falling, in part because of U.S. companies’ increased reliance on offshore production. That trend is likely to accelerate as manufacturers push to meet the expected increased demand for high-tech equipment in Europe, Hatch said.
But outside the mainstay high-tech industries, there are some bright spots. And some Southland companies are diversifying outside their traditional work in an effort to preserve business and save jobs.
The strategy at Pacific Scientific Corp., a Newport Beach-based maker of aerospace and industrial instruments, has been to apply the same technology to both military and commercial aircraft applications, said Chairman Edgar S. Brower. As a result, the company, which employs several hundred people in Southern California, has reduced its military sales to 25% from 30% of total sales and kept its employment around 1,800.
