OC’s Big Hardware Names Cut Nearly 2,000 Jobs Locally
Trimming fat is good for your health.
At least that seemed to be the take at Orange County’s largest computer hardware companies. The 25 companies on this week’s Business Journal list,ranging from multinationals such as Toshiba Corp. to smaller players including Procom Technology Inc.,cut OC employment by 16%, or 1,774 people, to 9,525 jobs this year.
The trend is a stark difference from the 7% year-to-year job growth and 11,152 total OC jobs posted by the companies on last year’s list. Two years ago, the number of OC computer hardware jobs grew by 2%.
The past year is one for the books: the period saw massive layoffs at technology companies across the country. Computer hardware was hit hard as large corporate customers cut tech spending to save cash as their own businesses slowed.
The crippling effect was felt everywhere. And while OC didn’t feel it as sharply as Silicon Valley, signs of the larger tech slowdown abounded.
This week’s list ranks locally based computer hardware makers and companies with operations here by their OC employment. The list includes makers of desktop and laptop computers or ready-to-sell components that work with them. Not included are semiconductor makers such as Broadcom Corp. and Conexant Systems Inc., which faced another set of challenges altogether.
Nor does the list include the completed and announced layoffs by Santa Ana-based computer products distributor Ingram Micro Inc., which plans to cut 1,470 people, including 640 in OC.
Eleven companies on the list posted job losses, 11 added employees and three reported no change. But the gains posted paled in comparison to the losses, especially those at last year’s No. 1 and No. 2 companies.
Irvine-based No. 1 Toshiba America Information Systems Inc. delivered the biggest blow to OC computer hardware employment, accounting for half of the job cuts on the list.
As with other computer makers, Toshiba has seen declining profits on each machine it sells,prompting the need for cost cutting. In February, Toshiba announced plans to cut 900 OC jobs by shifting production of its laptop and desktop computers from its Irvine plant to cheaper facilities in Japan and the Philippines.
But even with the staffing cuts, Toshiba just beat Fountain Valley-based memory products maker Kingston Technology Co. for the No. 1 spot on this year’s list, posting 1,400 OC employees, a 39% drop from a year ago.
For its part, Seagate Technology LLC fell dramatically from the No. 2 spot last year to No. 11 on this year’s list after closing its Anaheim plant as part of a companywide cutback of 8,000 jobs. Seagate eliminated 870 OC jobs, dropping local employment 73%. The Scotts Valley-based company still employs 330 people at its Costa Mesa facility, which makes tape and removable drives.
With Seagate’s fall, several other companies among OC’s top 10 computer hardware makers were able to move up a notch.
Seagate and Toshiba weren’t the only job cutters. No. 5 Gateway Inc. reduced OC employment 14% to about 600 employees. The PC maker, which, like Toshiba, has seen declining margins on its machines, moved North American server production from Lake Forest to its North Sioux City, S.D., plant.
The company also shifted jobs from its Lake Forest-based business computing segment down to its San Diego headquarters.
Several of the largest makers of data storage gear, such as Compaq Computer Corp. and EMC Corp., have seen one of the worst years in their history as big companies slowed down tech spending. In this area, tape drive maker Quantum/ATL Products Inc. fell a spot from last year to No. 10 after it slashed nearly 26% of its OC workforce,part of a companywide cost-cutting effort that brought overall employment from 2,000 to 733. Quantum/ATL, a unit of Milpitas-based Quantum Corp., employs 335 people in Irvine.
Weakness in the storage sector also hit Lake Forest-based computer disk-drive maker Western Digital Corp., as its sales dropped 16% from last year to $1.96 billion. Still, the company actually bumped up its OC employment by 25 people to 725 despite cutting about 1,000 jobs companywide.
Showing perhaps the strongest results in a weak market were OC’s memory companies. Kingston saw both good and bad in the past year. The venerable maker of memory modules for computers and devices secured the No. 2 spot by taking Seagate’s place. Still, Kingston had the tough experience of laying off people for the first time in company history, bringing its OC employment number down 3% to 1,144. But even with fewer employees, the company was able to grow annual sales by 21% to $1.7 billion.
Similarly, Santa Ana-based memory module maker SimpleTech Inc., which just shortened its name from Simple Technology, pumped annual sales some 60% to $308 million last year and increased the company’s OC roster by 7% to 349 people, landing it the No. 9 spot.
Unlike some other tech companies, SimpleTech has said it doesn’t see layoffs in sight.
“We aren’t looking at doing any cost-cutting or layoffs or anything,” SimpleTech Chief Executive Manouch Moshayedi said. “We try to keep things pretty slim here.”
Rancho Santa Margarita-based Viking Components Inc., which also makes memory modules, upped its OC employment numbers by 6% to 495, landing it the No. 7 spot. Still, the memory module maker laid off nearly 16% of its staff companywide and saw revenue grow only 9% as it fought a tough market.
Aliso Viejo-based QLogic Corp., a maker of fibre-channel networking chips and components, came in at No. 8 with 353 OC workers, dwarfing its old parent,Costa Mesa-based Emulex Corp.,which held its No. 17 spot.
Emulex, a maker of fiber-channel switches, bumped local employment by nearly 12% to 179 and doubled overall employment to 310. The company managed to increase its sales by 67% to $227.7 million last year after entering new markets and striking new deals.
Some companies made big jumps on the list in the past year,such as Irvine-based The Linksys Group Inc. The company is quadrupling the size of its headquarters with a move to a building near John Wayne Airport. The company, which was in 30,000 square feet a few blocks away in Irvine, has signed a five-year, $4.2 million lease for a 120,200-square-foot building on Teller Avenue. Linksys is expected to move by August.
Despite the massive tech slowdown, an old name in the business,No. 3 Unisys Corp.,played a stabilizing role in OC, keeping its 1,000 local employees intact. Still, the company laid off about 100 employees companywide and watched sales slump nearly 7% to $6.89 billion.
Irvine-based printer maker No. 6 Printronix Inc. lowered local employment 2% to 527 people as revenue slid 10% to $170 million as the market for printers suffered in the general slowdown in business and consumer spending. n
