Bay Area Troubles Sending Workers In L.A.’s Direction
Kellyn Brannon was perfectly happy living in San Francisco, where she had been chief financial officer of Fort Point Partners, a technology consulting firm.
But Fort Point Partners wasn’t doing so well. Having filed an initial public offering on the heels of a $30 million round of financing in 1999, the company hit the wall last year. It was forced to pull its IPO, lay off employees and eventually cut loose its CFO.
So Brannon ended up back in the job market.
Only this time, the job turned out to be in Los Angeles. So last November, she moved here to join startup Creative Planet, where she is now president.
Brannon’s story is not unusual. As the technology bust left thousands of people jobless in Northern California, it also opened a path of opportunity in Los Angeles.
“The Bay Area folks are moving all over to Austin, Boston and New York. L.A. is a lesser evil. It’s got a better cost of living, you don’t have to move so far and there still are positions,” said Jeremy Gocke, founder and president of operations for The Layoff Lounge, an L.A.-based networking organization for technology executives.
Statistics compiled by U-Haul International Inc. confirm the southward movement.
In the period from Dec. 1, 2000 to Feb. 28, 2001, 3.5 percent more families moved into L.A. than out, according to one-way transaction figures. During the next statistical period (March 1-April 15), that figure jumped to 8.8 percent, and in the April 15-May 31 period it inched even higher, to 9 percent.
Meanwhile, a reverse flow has been taking place in San Francisco. During the March-May period, 12.7 percent more families moved out of that city than moved in. And for those departing San Francisco, Los Angeles was the No. 1 destination.
“That is a new trend to have net migration to L.A.,” said Ross DeVol, director of regional and demographic studies at the Milken Institute in Santa Monica.
Golden opportunities
The main reason they are coming here is jobs. While the Westside fell prey to the dot-com demise, L.A. remains home to Caltech, the Jet Propulsion Laboratory, UCLA, USC, the entertainment industry and the re-emerging aerospace/defense industry. It has a growing biomedical industry as well. And unlike the Ciscos and Hewlett-Packards of the north, which cut back staff after orders declined, the overall tech industry in L.A. is still on the rise.
“You know the times have changed when you see ads in the newspapers for Northrop looking for good engineers,” said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp.
But for many newcomers, moving here was not a quick-fix decision. After all, L.A.-bashing is a favorite pastime in most parts of the Bay Area.
Though the tech bust hit in April 2000, Northern Californians did not start moving here in significant numbers until March of this year, partly because of the usual lag in job searches.
“Outside the county line, people have a strange view with L.A.,” said Kyser. “I’m third generation Angeleno, but I worked in Omaha for three years and they were horrified that I returned.”
U-Haul reports that 27.4 percent more people moved out of Mountain View than moved in during the April 15-through-May 31 period, the most recent period reported. For those leaving during that period, Los Angeles was the third most common destination, topped by Sacramento and Las Vegas.
The draw of L.A. also is tied to certain contract awards. For example, the Lockheed Martin facility in Sunnyvale, a major employer of engineers living in Mountain View, lost a major contract earlier this year to Boeing to produce a spy satellite system. As a result, Boeing has been actively recruiting in Los Angeles since the beginning of this year.
San Jose residents may have too much specialized computer knowledge to transfer their skills to defense-related or biochemical companies, which are more prevalent in L.A.
Not all the relocations involve techies. A significant portion of those leaving the Bay Area for Los Angeles are in service industries that had been supported by the tech boom, including attorneys, advertising executives and hotel workers.
Migration from a major tech center is not unique to California, said Jon P. Goodman, executive director of EC2, a tech incubator at USC. Nationwide, people are flocking from tech hubs like Silicon Valley and Austin, Texas, to wherever they can find a job.
