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Posted: 11:45 p.m., EDT, 7/17/98

In layoffs' wake, unemployment hits 2% for EEs

By Robert Bellinger

ORANGE, Mass. — EE unemployment rose above 2 percent last quarter, the first hard evidence that recent staffing cuts at semiconductor and electronics companies are taking the bloom off a once-rosy job picture.

Robert Rivers, editor of Engineering Manpower newsletter here, estimates 2.2 percent of EEs, or 14,000, were unemployed in the second quarter-more than double the 6,000 total in the first quarter, when the jobless rate was 0.8 percent. On the flip side, 635,000 EEs had jobs in the second quarter, vs. last year's overall average of 649,000, Rivers calculates.

More than 35 electronics, semiconductor and aerospace/ defense companies have cut an aggregate 100,000 jobs since January-some due to layoffs, some to attrition.

And, "it's going to get worse," Rivers said. The Asian financial meltdown is worsening, not improving, he maintained. Japan's political situation is in turmoil, and there are fears that the yen will be devalued, touching off devaluation by China. Virtually all the U.S.-based companies that have downsized have laid the blame for missing their financial targets on the economic problems in the Far East.

Extracting his figures from Bureau of Labor Statistics numbers, Rivers noted that electronic engineers are getting hit harder than their peers in other specialties. Second-quarter unemployment among engineers as a whole was 1.6 percent, 0.6 percentage points below that of EEs.

Rivers acknowledged that statistical variation of up to a half point can occur in examining engineering unemployment by discipline. "But going from 0.8 percent to 2.2 percent is something significant," he said.

The bad news has many EEs worried. Said Richard Tannehill, a P.E. from Glendale, Ariz., "The Motorola-announced layoffs have caused a lot of concern here, although most Motorola employees in Arizona have been spared." Motorola said last month it would trim its worldwide staff by up to 15,000. "I think everyone understands that the kind of times we've seen the past year or two for engineering employment can't last forever."

Tannehill pointed out that during this time, "many of the engineers have not been hired as full-time employees, but only as temps or 'job-shoppers,' so they realize their hold on these jobs is tenuous."

Indeed, Leon Eras, of AzTech Recruitment (Phoenix), said contractors are showing up at his office seeking permanent employment.

Losing a job is never easy, although engineers today have been hardened by the downsizings of the early '90s. "Each engineer has to find his own answers," said Iomega engineer Bob Kier whose company announced layoffs in June. "It's like starting all over again, and we thought we were through when we got our first jobs."

Despite the setbacks, some remain upbeat about the job market. "The market for EEs is still very, very strong," insisted recruiter Bruce Rafey, of Bruce Rafey Associates. Even with the rise, the EE unemployment rate is half that of June's national average of 4.5 percent.

At one point last year, the EE jobless rate plunged as low as 0.4 percent, prompting many to describe the hiring situation for EEs as a "shortage." Rivers has never used that term, believing that if companies pay enough, they would get the people they need. The newest tally, and the ongoing Asian crisis suggests that the "shortage"-if there was one-is easing. A number of companies have cut back hiring plans this year.

Some engineering disciplines continue to do very well, Rivers noted, including programmers (1.6 percent); computer science/systems analysts (1.1 percent unemployment in the second quarter); and civil engineers (0.2 percent).

Indeed, there's been no letup in information-technology-industry demand. A new survey from Positive Support Review, an independent management consulting company in Santa Monica, Calif., cites a continued "lack of skilled and experienced IT professionals at all levels." That has led to sharp salary hikes ranging from 11.5 percent at senior management level to 8.1 percent at the staff level.

Rivers blames the poorer EE employment rate on the disproportionate number of layoffs in semiconductor and electronics companies. Since June, such big employers as Texas Instruments, Lockheed and Motorola announced job reductions in the thousands.

In the upcoming "1998 EE Times Worldwide Salary & Opinion Survey" (coming Aug. 31), 3.6 percent of the respondents said they had been unemployed at some point in the past 12 months. However, that is a yearly total, not how many were jobless in the second quarter.

The numbers will not improve the chances for passage of an industry-backed bill to raise caps on temporary workers, particularly for engineering and software people.

While it passed the Senate, the bill is stalled in the House as industry fights so-called "worker safeguards" incorporated into the bill.

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