Forecast West Coast MIS Job Market
There is some light at the end of the tunnel. The second quarter should be normal....
by M. Victor Janulaitis
Now that the election is over, the economy can finally move ahead. By the way, my forecast on the election results was right on. We now have a new Senate team. Let us hope they have a better view of how to create jobs than the old team.
In the last few weeks we have not had the announcements that ten to twenty thousand jobs are leaving the West Coast. What we have had are sporadic cuts of 1,000 to 1,500 jobs from companies that had already announced those cuts.
The California Industry Migration Study, produced by five big utilities, found that the job flight from Southern California was no worse than from the rest of the state. Some good news was that the California Employment Development Department results for September showed a jump of 110,000 jobs for the month of September in Los Angeles County. That number is still 108,000 less than were employed in same month last year. But the trend is good.
The bad news was that the California Industry Mitigation Study found that Los Angeles County accounted for 36% of all large California manufacturers that chose to relocate or expand outside of the state since 1980. On the bright side, the study found that just 29% of the manufacturing companies that remain in Los Angeles county have plans to relocate or expand elsewhere by 1995. For your information, according to late 1987 business census data Los Angeles County has well over 40% of the state's manufacturing jobs.
The area of concern voiced in the study is that high technology jobs are the ones that are the most at risk on the West Coast. For example, Apple computer is closing down over 1,500 jobs in Northern California to move to Texas.
As an interesting side note on the lack of governmental support, the Public Utility Commission (PUC) criticized the utilities for publishing the study. The PUC said it was not the business of utilities to do economic studies. I guess the PUC feels that utilities do not need to know what is happening to their customer base.
On the data processing front, things do not look as bad as they were a few months ago. There still is a general continuing Reduction In Force (RIF) program going on. I know of at least two larger data processing organizations that are continuing to downsize. One of these companies plans on laying off a large percentage of its staff after the new year. There was one rather massive layoff just recently with the announcement that Mazda was canceling its luxury car, a $100MM write off.
One CIO put it very crisply. In the early 1980's, the Japanese sold all the cars they could land. They managed to supply to the cars available. Now they have to manage to demand and demand is not all that great.