Slim Job Market Shocks Engineers

Like many engineers, Rodrigo Suarez never went begging for work. He was accustomed to shooing away recruiters. The one time Suarez was laid off before, in 1989, he landed another job within two weeks.

But now, four months after being dismissed from Toshiba America Inc. in Irvine and still unemployed, the 42-year-old father of three has learned that engineering isn’t the vaunted occupation he always believed it was. That belief was a prime reason Suarez became an engineer, but his recent travails in the job market have been a sobering experience.

Forget lavish stock options and cool benefits. A growing number of engineers are simply looking for a steady paycheck.

Even though the jobless rate for the nation’s 2 million-plus engineers remains exceedingly low--2% in the second quarter--that’s double a year ago, according to the Bureau of Labor Statistics. And by most indications, the unemployment figure is likely to creep higher in the coming months.

Massive layoffs at technology firms this year focused on manufacturing, sales, marketing and administration. But as telecommunications, semiconductors and other businesses have begun making second and sometimes third rounds of cuts, they are reaching into every department, including engineering.

“I think we’re at the point now . . . where you’re going to see more and more engineers get caught up in these layoffs,” said Paul Kostek, a contract engineer and consultant in Seattle and former president of the Institute of Electrical and Electronics Engineers--U.S.A.

Kostek rattled off companies such as Lucent Technologies Inc., Cisco Systems Inc. and JDS Uniphase Corp.--each of which has announced thousands of job reductions. “You know that in those numbers, more engineers are going to show up,” he said. “The question is how many.”

The last time the U.S. engineering work force shrank significantly was in the early 1990s, during the economic slump and defense downturn. Memories of that retrenchment, which companies later regretted because they soon found themselves short of engineers, may help contain the layoffs this time around. What won’t help is further softening of business, particularly in the hard-hit communications industry, where nearly one-fifth of all electrical engineers today work.

Though the labor market for engineers generally remains solid, there is wide variation by industry, region, engineering specialty and experience. Engineering jobs at consumer electronics and chip-making firms are much harder to come by these days. The market for telecom engineers also is said to be depressed.

But overall, electrical and computer engineers, especially those specializing in software and design and development, continue to be in high demand and are enjoying record salary increases. Federal data indicate that the typical engineer earned more than $1,100 a week last year, but full-time electrical engineers working in their primary area of specialty will be pulling in nearly double that this year, according to a recent survey by the Institute of Electrical and Electronics Engineers.

Brisk Hiring at ‘Old-Economy’ Firms

Meanwhile, college graduates majoring in engineering are still getting offers, although not as many as before, and there are reports of some employers rescinding offers or giving bonuses to graduates to delay their start dates. The generally shrinking number of engineering graduates in recent years, especially mechanical and civil, has helped those coming out of school.

For recent graduates and veterans, the weakening demand from “new economy” firms is being made up by brisk hiring at more established companies. With funding for the F-22 and other defense programs being firmed up, defense companies are adding engineers again, Kostek said. Engineering giant Fluor Corp., which has been busy designing power plants, has added 2,300 engineers since January and plans to bring on 3,300 more over the next 12 months.

Lisa Glatch, a chemical engineer who is Fluor’s senior vice president for human resources, says she’s looking for all kinds of engineers--civil, chemical, control, process, electrical. Some of the recent hires have been rehires of Fluor engineers who had left for the promised riches of the dot-com world.

“The marketplace is better for us,” Glatch said.

For the Unemployed, Time to Retool

That’s also the case for academia, which is getting more applicants for graduate engineering programs as well as more interest from professionals who want to join the engineering faculty.

“We may not be able to match their salaries, but the . . . economic situation has helped more of those guys come our way,” said Yahya Rahmat-Samii, chair of UCLA’s electrical engineering department.

That’s little comfort to laid-off engineers.

Nick Powarzynski, 51, worked alongside Suarez at Toshiba’s laptop operations in Irvine as an electronics test engineer. In 25 years as an engineer and technician, Powarzynski had never been laid off. He had been at Toshiba for only five years but figured he could retire from the company. If ever there was job security, he thought, this was it. But then he was laid off.

“It was kind of an eye-opener,” Powarzynski said.

After leaving Toshiba in the spring, he quickly found work at a small networking firm in Corona del Mar. But that company then lost a major client and eliminated three jobs this month--one of them his.

Powarzynski, who is single and lives in Trabuco Canyon, said he’s now looking for part-time work while he attends classes at night to get certification on Microsoft operating systems.

“This time I’m shifting gears,” he said, “away from computer manufacturing to the information technology industry, so I can work at any number of companies.”

That sort of shift is happening on a wider scale. The survey of electrical engineers showed that 3.2% specialized in computer hardware this year, down from 3.7% two years ago. More engineers also are shifting locations for work, surveys and experts say.

Dudley Brown, managing director of Bridgegate, a high-tech recruitment firm with offices in Los Angeles and Orange counties, said more Silicon Valley workers are considering jobs in Southern California. Brown said the best opportunities for engineers in Southern California are in Orange and Ventura counties, where there is a more diverse base of technology companies than in West Los Angeles and Santa Monica, where there is a heavy concentration of dot-coms.

Experts say the market for engineers is generally stronger in the Midwest, where unemployment is low.

It has been hard for some engineers to accept that employers have become much more selective in hiring. And layoffs have been a shock. The overwhelming majority of engineers--about 80%, according to professional surveys--have never lost a job because of downsizing. Studies also show that many engineers have been with one employer, usually a big company, for a long time.

Rules of the Game Have Changed

“It feels pretty miserable--the lack of security, the feelings of rejection and worthlessness,” said Mike Henderson, who was laid off in March from Conexant Systems Inc., a communications chip maker in Newport Beach.

Even with an MBA and experience helping companies develop long-range technology strategies, it was three months before Henderson joined TDK Semiconductor Corp. in Tustin. There was no lucrative signing bonus, and his pay didn’t increase as it might have had he switched employers during the boom times. But now Henderson has a job he likes, and for that he is grateful.

“I’ve always wondered about people who just took a couple of months off and didn’t worry about where their next job is coming from,” he said. “I was really worried, and I really wondered about that question.”

Suarez, the former Toshiba engineer, is still wondering. He has never searched so hard for work. And he’s learned that the rules of the game have changed since the last time he was in the labor market, in 1989.

Then, Suarez looked through ads in newspapers, sent his resume out, then followed up with calls to personnel managers at companies. But now, with the Internet, “they don’t want people calling,” he said. “They just go through e-mail. . . . There’s a lack of human interaction.”

Suarez has posted his resume on Internet job sites and elsewhere, noting his managerial experience and skills in hardware and software systems integration and testing. What little response he’s gotten has been discouraging.

“There are a lot of positions for specific and specialized engineers. They’re looking for a niche,” he said. “Either those jobs are on hold or the company is waiting for the next quarter for better results. Jobs are listed, but they’re not really hiring.”

After interviewing at several technology companies, Suarez is now looking to city and government offices, including the California State University system, for a job as a computer systems administrator. He has scaled down his expectations. He earned $72,000 at Toshiba but now figures he probably won’t make more than $60,000 in Southern California.

And even though he doesn’t want to move his family--his stay-at-home wife and three young daughters--he has begun considering opportunities out of the area. He spends his days combing the Internet for job listings, attending seminars at the state’s employment office and working in the yard outside his Mission Viejo home. To Suarez, his electrical engineering degree and experience were synonymous with jobs.

“That’s what I thought,” he said.

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Times staff writer Don Lee contributed to this report.

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Engineer Work Force Slowdown

Although engineers still have it good in the labor market, massive layoffs at high-tech companies are beginning to take a toll. The engineering work force shows signs of tapering off, and the unemployment rate has doubled in the last year.

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Unemployment rate for Engineers (U.S.): 2.0%

Engineering Work Force (in millions): 2.16 million*

Earnings Median weekly gross: $1,104

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Where Electrical Engineers Work

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Industry Pct. Communications 18.8% Computers 12.1 Electronic manufacturing 11.5 Utilities 9.5 Consulting 8.1 Defense (not aerospace) 8.0 Education 8.0 Aerospace 7.2 Other 17.0

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Engineers by Type, 2nd Quarter 2001

Electrical: 35%

Mechanical: 16%

Civil: 14%

Industrial: 12%

Aerospace: 4%

Chemical: 4%

All others: 15%

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Sources: U.S. Bureau of Labor Statistics, Institute of Electrical and Electronics Engineers