COMPUTER REBOOT
After Three Down Years, Gear Makers Post Jobs Rebound
By MICHAEL LYSTER
Western Digital Corp. and QLogic Corp. drove a 2% jobs gain at Orange County’s largest computer products companies last year, reversing a three-year slump for the group that started in 2000.
In all, the 25 largest computer products companies here employed 8,206 people locally, 173 more than in 2003.
That’s according to this week’s Business Journal list, which ranks makers of computers and related products by local employment.
It includes companies based here and local operations of companies based elsewhere.
Chipmakers, which appear on a separate list, aren’t included. Contract electronics makers, such as Anaheim-based DDi Corp. and Santa Ana-based TTM Technologies Inc., are set to appear on a new list slated for later this year.
While subtle, last year’s jobs gain marks a turnaround for a group that posted a 16% employment plunge in 2000 and declined around 7% in both 2001 and 2002.
No. 3 Western Digital, the Lake Forest-based disk drive maker, accounted for most of the gain by adding 105 people to its OC headcount for a total of 880.
The company’s move into drives for portable computers and demand for drives in video recorders and other consumer electronics fueled the hiring.
Late last year, Western Digital subleased 50,000 square feet of extra space at Gateway Inc.’s former Lake Forest facility. The move was designed to make way for more engineers working on portable computer drives at Western Digital’s nearby headquarters.
In a side note, computer maker Gateway returns to this year’s list after dropping off with 2001’s closure of its Lake Forest facility. The company’s buy earlier this year of Irvine-based eMachines Inc. puts Gateway at No. 16. EMachines ranked No. 20 on last year’s list.
Look for Gateway to rank higher next year with the company’s pending move to Irvine this summer.
No. 5 QLogic, an Aliso Viejo-based maker of networking gear for data storage, also provided a boost to the group, adding 51 OC workers for an 11% gain to 517 people.
Like Western Digital, QLogic is taking more space to house its extra workers. (See Technology column, page 28.)
The growth comes despite a hiccup earlier this year when QLogic lowered its guidance for the first three months of the year because of a drop in orders for host bus adapters from two customers. The company’s shares plunged on the news and are down some 45% for the year.
Other gainers on the list: No. 7 Cisco Systems Inc., which saw a 14% gain to 288 people at its Linksys unit in Irvine (Cisco counts a total of 463 workers in OC.); No. 8 Santa Ana-based memory products maker SimpleTech Inc., which grew 12% to 407 OC workers; and No. 11 Costa Mesa-based Emulex Corp., a maker of data storage networking gear, which was up 19% to 288 people in OC.
The companies grew employment here as they cut jobs elsewhere. Total employment at the group declined by 2% to 45,008 people. The loss came largely by way of Gateway, which more than halved its employment to 4,100 people to bring costs in line with slumping sales.
The gain in OC employment came despite declines at the two largest computer products companies.
Perennial No. 1 Irvine-based Toshiba America Information Systems Inc. is flat with a year ago by percentage but reported five fewer OC workers than a year earlier.
The maker of laptop computers and other products has cut jobs for the past few years. And more cuts are coming: Earlier this year, Toshiba said it would let go of 150 workers as it sheds its wireless networking and cable modem businesses.
No. 2 Fountain Valley-based Kingston Technology Co., a memory products maker, shed 43 jobs for a total of 958 OC workers. Kingston has seen its local headcount shrink as its business in China has grown.
Toshiba and Kingston weren’t alone.
Signs of the tech downturn still lingered at several companies on the list.
Among them: No. 9 Costa Mesa-based Certance LLC, formerly Seagate Removable Storage Solutions. The former Seagate Technology unit was split off last year by an investment group led by Silver Lake Partners and Texas Pacific Group, which took Seagate private in 2000.
Certance, which makes tape backup gear, reported a 7% drop in OC workers to 350 people.
Other decliners: No. 10 Quantum Storage Solutions Group, a Quantum Corp. unit that was down 17% to 331 OC workers; No. 17 Cal Quality Electronics Inc., a maker of servers, controllers, and other gear, off 17% to 125 OC workers; and No. 24 Tustin-based MTI Technology Corp., a provider of data storage products, down 29% to 56 local workers.
Along with Certance and eMachines, the acquisition of last year’s No. 19 Irvine-based Rainbow Technologies Inc. brings another new name to the list: SafeNet Inc. The Baltimore-based maker of computer security products, which ranks No. 22 with 75 OC workers, bought Rainbow in March.
The buy resulted in a 43% decline to Rainbow’s Irvine operation as SafeNet cut duplicated jobs.
Three companies on last year’s list didn’t repeat this time around.
Circuit board maker DDi, which ranked No. 11 last year, was taken off to reappear on a list of contract electronics makers the Business Journal plans to debut later this year.
Irvine-based Kofax Image Products Inc., last year’s No. 14, appears on the list of software companies on page 25. The move was prompted by software’s bigger role at the company, which makes document imaging and management programs.
Dane-Elec Corp., an Irvine memory products maker that ranked No. 24 last year, didn’t meet this year’s cutoff with 40 workers.
That made way for three new entries: No. 20 IOGear Inc., an Irvine seller of keyboards and other computer devices; No. 21 I/O Magic Corp., an Irvine seller of compact disc drives and other products; and No. 25 Irvine-based Procom Technology Inc., a maker of data storage products.
