The county’s largest computer product makers shed jobs at a modest clip in the past year, reversing two straight years of employment gains.
The 25 largest computer product companies with operations here cut 240 local jobs, leaving a total of 6,162 employees as of March, down 3.75% from a year earlier, according to this week’s Business Journal list.
Job Losses
Recent job losses came in the form of restructurings and industry consolidation, continuing a longer trend of industry cuts.
The sector shed about 2,000 local jobs between March 2006 and March 2010 as corporate customers cut back on technology spending during the recession.
Five companies on the list added employees, nine cut jobs, and three were flat from a year earlier. Eight rankings were based on Business Journal estimates.
A diverse range of companies comprise the list, from disk drive and memory products makers to accessory and networking companies. The list featured one newcomer and a few shake-ups, with 11 companies maintaining the same slots as last year, including the top four.
The perennial No. 1 company, Western Digital Corp., maintained a workforce of 1,600 people, the same number it had a year earlier. The Irvine-based disk drive maker began this year under new leadership as Steve Milligan replaced John Coyne in the top post.
Milligan inherited a company known for crisp execution in a volatile industry in which quarterly demand swings wildly. Coyne, who took on the role in 2007, had guided Western Digital through recovery efforts in flood-engulfed Thailand and through its largest acquisition, a $4.8 billion deal for San Jose-based Hitachi Global Storage Technologies Inc. that positions the company to battle for the top position among drive makers.
That unit, which caters to corporate customers, helped drive strong results in the recently ended quarter.
Western Digital recorded net income topping $514 million, up 6.4% from a year earlier, on sales of $3.8 billion, up 26.7%. Both marks beat Wall Street expectations.
The company is the world’s largest disk drive maker in units sold, shipping 60.2 million units in the March quarter. The drives store data on computers, external storage devices, corporate networks and consumer electronics.
Kingston
No. 2 Kingston Technology Co. saw employment remain flat at 800 people. The Fountain Valley-based company is the top memory products maker for computers and consumer electronics.
The Business Journal estimates it saw $5 billion in sales in 2012, down about 9% from 2011.
The decline resulted from slowing demand and dropping prices on DRAM products, the most common type of memory used in computers and other consumer electronics, and Kingston’s biggest revenue source.
Global shipments of PCs and laptops, which consume the most DRAM, dipped 3.7% in 2012, according to Framingham, Mass.-based market researcher International Data Corp.
No. 3 QLogic Corp. added 40 people, bringing its workforce to 539 employees, up 8% from a year ago.
The Aliso Viejo-based networking equipment maker has been on a hiring push in the past year to fill positions across the board, from software and firmware to design and verification.
It recently introduced a line of adapters geared toward large corporate customers, which promoted some hiring “to support the added requirements we have with these new products,” spokesperson Phil Felando said.
QLogic, a longtime leader in the fibre-channel networking segment, is among a burgeoning group of companies competing in the emerging 10-gigabit Ethernet connection market for data centers.
Emulex
Costa Mesa rival Emulex Corp., which moved up one spot to No. 5, despite shedding four people for a workforce of 365 employees, also is a competitor in the 10-gigabit business segment, which is seen as an improvement over standard fibre-channel and 1-gigabit connections prevalent in data centers today.
Emulex earlier this month staved off a proxy battle with its largest shareholder through the appointment of two directors.
New York hedge fund Elliott Management Corp., which has a history of high-profile sales and acquisitions in the technology sector, became Emulex’s largest shareholder late last year after boosting its stake to more than 11%.
The hedge fund joined a chorus of shareholders who opposed the company’s recent $120 million buy of New Zealand-based Endace Ltd., which makes technology designed to record, visualize and monitor network traffic.
Some company watchers also have voiced concerns over the top-heavy cash deal.
“It’s not exactly clear to me what the strategic synergies are,” said Aaron Rakers, managing director of equity research for enterprise hardware and hard disk drives for St. Louis-based Stifel, Nicolaus & Co.
No. 6 San Jose-based Cisco Systems Inc. reported 357 local employees. The world’s largest networking-equipment maker, with $46 billion in annual sales, didn’t provide figures last year.
The company last month sold its Irvine-based home networking group, Linksys LLC, to Belkin International Inc. in Playa Vista.
Financial terms weren’t disclosed, but Linksys was expected to sell for much less than the $500 million Cisco paid local entrepreneurs Victor and Janie Tsao for the company in 2003.
STEC
No. 9 STEC Inc. shed 100 jobs, the most of any company on the list, and now counts about 200 in its local workforce, down 33% from a year ago.
The company implemented a restructuring earlier this year following a steep drop in sales to its core customer base of original equipment makers. It recently initiated a direct sales program in a bid to move beyond OEMs and win business in several markets, including financial services, oil and gas, and social media.
The company is facing a looming proxy battle with its two largest shareholders, which have called for a sale, management changes, and an overhaul of the company’s board.
STEC, which once dominated market share for enterprise-grade solid-state drives, or flash drives used in corporate data rooms, saw sales plummet 45% last year to $168.3 million.
The developments follow the resignation of former Chief Executive Manouchehr Moshayedi, who is facing insider trading charges by the Securities and Exchange Commission.
STEC’s board in September appointed Mark Moshayedi—Manouchehr’s brother—interim chief executive.
No. 24 Kanex was the only newcomer to the list, with 25 local employees. The Brea-based company, part of Apogee Inc. of Austin, Texas makes connectivity accessories for Apple products.
Download the 2013 OC’s LARGEST COMPUTER PRODUCTS COs list (pdf)
