Newer Computer Gear Makers Post Big Job Gains as Older Ones Shed Workers
Even in the new economy, the young break herd from the old.
Orange County’s largest computer hardware manufacturers saw their local employment numbers split along new and old lines in the past 12 months. The group of 25 companies, which ranges from older names such as Western Digital Corp. to fresher faces like D-Link Systems Inc., saw local employment grow 7%, or by 693 jobs, to 11,152, according to this week’s list.
While the job growth rate is more than triple that of the county as a whole, it’s hardly the double-digit gains seen at hardware makers in earlier years. Comparing totals from last year’s top ranked companies, overall employment grew at an even more tepid 4%.
The employment figures at the companies themselves vs. those that were on last year’s list are different because two companies on 1999’s roster dropped out of the top 25. Mitsubishi Electronics America Inc. is moving its computer monitor division from Cypress to Itasca, Ill., in a joint venture with NEC Corp. MAG Technology, another monitor maker, is moving from Fountain Valley to the city of Industry.
The 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., Conexant Systems Inc. and QLogic Corp.
Two of OC’s older hardware companies, disk-drive maker Western Digital and Toshiba America Information Systems Inc., offset strong growth at other companies on the list.
Toshiba, an Irvine-based unit of Japan’s Toshiba Corp. and the county’s top hardware employer, lost 395 local employees after splitting off four of its smaller divisions into a new company called Toshiba America Business Solutions Inc. Toshiba still held the No. 1 spot this year with its 2,300 employees, though its head count is down 15% from a year ago.
No. 3 Irvine-based Western Digital, which is downsizing as it tries to compete against stronger disk-drive rivals, cut 100 jobs in the past 12 months for a total of 700 local employees.
When Western Digital and Toshiba are taken out of the mix, the remaining 23 companies posted a healthy 17% OC job growth rate, adding an impressive 1,188 new jobs locally.
Makers of networking equipment,particularly the high-speed, high-volume networking that has put Orange County on the technology map,were the big bright spots on the list.
D-Link Systems, an Irvine company that makes an assortment of networking gadgets, jumped from No. 17 on last year’s list to No. 12, adding 90 people to its OC work force and 1,100 overall for a company-wide count of 2,400 workers. D-Link’s sales more than doubled to $750 million for the 12 months through March.
And Emulex Corp., which makes networking gear that includes products for the fast-growing fibre-channel market, rose a notch to No. 18, boosting its workforce by 12% locally to 138 people. The company saw revenue rise 93% to $119 million through March. Most of the new employees work in the company’s engineering and research departments.
Chief Executive Paul Folino credited much of the growth to increased demand for faster storage products. Fibre-channel has become more popular for storage-area networks, which allow companies to easily attach new data storage devices to existing networks.
Irvine-based Rainbow Technologies Inc., which makes computer security equipment for company networks and those linked to the Internet, climbed two places to No. 15, adding 70 people locally and 230 company-wide.
Rainbow acquired several companies last year, including InfoCal LLC, InfoSec Labs Inc. and Systematic Systems Integration.
Robert Shields, Rainbow’s director of strategic marketing, said corporate users have become more concerned about security but don’t want to sacrifice performance in their e-commerce systems due to the addition of encryption technology.
Rainbow makes devices designed to speed the process of coding and decoding information sent over the Internet to hide sensitive data from prying eyes.
“In a nutshell, you’ve got trillions of dollars of investments made over the past 30 years being exposed to the outside world because of the Internet,” he said. “The proliferation of Internet connections means there are multiple points of entry to disrupt that investment.”
Positive signs emerged in other areas, too.
One older technology company, No. 8 Gateway Partners, the computer server unit of Gateway Inc. that operates out of Lake Forest, held its ranking and added about 280 OC workers, a two-thirds surge to 700. Servers, fueled by the Internet, are a fast-growing area for Gateway, whose total employment grew 15% in the past year, going from 18,000 workers to 20,000.
No. 24 Rugged Portable Electronics Inc.,a Santa Ana company that makes industrial-strength desktop, portable and server computers,added just 10 employees to its 60-person operation but saw sales jump 86% to $13 million through March.
Computer memory sellers, hit hard in recent years, made a comeback, led by Kingston Technology Co., which jumped two notches to No. 3 as it more than doubled its total workforce to 1,504 people, 480 of those at its Fountain Valley headquarters. And Kingston continues to grow. The company is hiring 200 new workers for a new $100 million wafer processing facility in Fountain Valley.
Growth is likely to continue for the entire industry as demand for memory continues to surge with a new breed of digital consumer electronics that store everything from pictures to music electronically.
Memory manufacturer Viking Components Inc. held its No. 7 ranking while adding about 70 people at its Rancho Santa Margarita headquarters, a 16% increase to 500. Its sales, meanwhile, jumped 23% to $357 million through March.
Santa Ana memory seller Simple Technology Inc., which includes the business-oriented SiliconTech subsidiary, jumped four spots to No. 10. It added just 10 people to its OC workforce and 20 people overall, additions of 3% and 6%, respectively, but enjoyed a sales spurt of 58% to $193 million in 1999.
French memory products maker Dane-Elec Corp. made its debut on the list at No. 23. The company’s Irvine unit doubled its employee base to 90 workers in OC. Most of those hires took place locally; company-wide, Dane-Elec added 60, for a total of 300 people.
The rising tide didn’t lift the fortunes of all memory sellers; Irvinebased Centron Electronics Inc., No. 23, saw no revenue growth and trimmed its workforce about 17%, leaving a workforce of 95 people, 75 of those in Orange County.
Things were universally bad for hard-drive makers.
No. 2 hardware employer Seagate Technology Inc., which announced it will close its 600-worker Anaheim plant this year, already slashed 21,000 people from its overall workforce in a 25% cutback. Though it added 50 employees to its OC rolls, the Anaheim closure will probably cut its local presence by half by next year. In addition to its hard-drive operations, the company runs a tape-drive manufacturing plant in Costa Mesa.
Similarly, Western Digital fell a spot to No. 5 with its 13% cut in OC jobs. Company-wide, Western Digital cut 1,000 jobs, leaving 9,000 total workers. Sales shrank 19% to $2.1 billion through March. n
