Erosion of Tech Jobs Continues as Telecom Slump Fails to Abate

By MIKE ALLEN

San Diego Business Journal

Large and small telecom companies in San Diego are feeling the effects of a global downturn in spending that shows no signs of rebounding any time soon.

Ericsson, the Swedish wireless manufacturer, announced earlier this month it was cutting half its research and development staff at its San Diego CDMA Systems unit about 500 engineers after deciding to move those functions to Montreal. The reduction will leave Ericsson’s local office with 500 employees, down from 1,250 when it acquired the division from Qualcomm Inc. in 1999.

Ericsson is in the middle of slashing 40,000 employees from its global work force of 100,000, to bring it down to about 60,000 by the end of next year. As of last week, it had 70,000 employees.

Vista-based Palomar Technologies is way down on the telecom food chain, but it’s also feeling the impact of massive spending cuts by telecom equipment makers and carriers. The company makes components used in fiber-optic communication networks.

Palomar Chairman Gary Gist said sales had fallen by at least 10 percent this year as many of his customers are pulling back from buying equipment, reacting to spending cuts from their customers. Palomar has also cut its staff from 230 two years ago to about 150 today.

“Two months ago, many of my customers said they were going to grow by an average of 10 percent, but I’ve seen that confidence erode as they slow down on their capital expenditures,” he said.

Telecom employment in San Diego hit a peak in 2001 when it had 28,400 workers. By early this year, the sector employed about 25,100, but that has certainly decreased since then, said Kelly Cunningham, research director for the San Diego Regional Chamber of Commerce.