Where Will HP’s Laid-Off Employees Relocate (If Necessary)?

In September of 2008, Hewlett-Packard (HP) took over information technology (IT) provider Electronic Data Systems, and then proceeded to cut 24,600 jobs. Today HP announced that it will be cutting about 9,000 more. Lately, technology firms in Silicon Valley have starting recruiting more aggressively again. But will there be enough technology jobs in the Valley for the 9,000 Hewlett-Packard employees that will be laid off over the next several years?

HP says that it will also be adding a total of 6,000 jobs to its sales and delivery teams, but the 9,000 laid-off employees will be from IT. The IT jobs will disappear as HP automates more of the services that it provides to clients. Some technology companies in the area, such as Google, Intel, and Cisco are adding jobs. But analysts say that many technology jobs are starting to migrate to other cities -- and laid-off technology workers are beginning to follow.

“It’s slow right now getting an IT job,” Barbara Portier, a resident of Campbell, told Silicon Valley reporter George Avalos (“Bay area’s job market still brutal,” Contra Costa Times, May 31, 2010.)  Portier was laid off from her job at Symmetricom Inc. a month ago. She says tech recruiters are very particular. “Their wish is pretty long and you have to have a lot of experience,” Portier explained. “They have a lot of specific requirements.” Most new jobs in the area right now are not in IT, but in hotels and hospitals.

HP’s laid-off workers may have to develop a different set of job skills, as companies begin to hire tech workers who will have to be prepared to creatively solve problems and develop “intelligent solutions”: technological solutions to the problems of having a workforce spread out over several cities, with many workers telecommuting from home. Instead of offering support to companies who have their information networks hardwired into one building, tech workers are increasingly having to work with networks that are connected through the Internet. Many tech jobs now have more of an emphasis on video conferencing and setting up virtual work environments.

Or, laid-off IT workers may have to add skills laterally, branching out into other up-and-coming tech areas such as biotechnology or agricultural technology.

Laid-off IT workers who leave the Palo Alto area may want to consider the following up-and-coming technology hubs:

• Austin, Texas, rated the #1 best city for the new decade by Kiplinger in 2010. Austin’s overall employment increased by almost 16 percent between 2004 and 2009, when employment rates were dropping in most other cities. Austin also ranks second in Forbes’ list of America’s Most Innovative Cities.
• Raleigh, North Carolina. Like Austin, Raleigh has become a smaller tech hub because of its universities. Raleigh ranks third in Forbes’ list of America’s Most Innovative Cities.
• Seattle, Washington, the home of Microsoft, Amazon, Boeing, and more than 700 technology industry organizations, rated #2 by Kiplinger and #5 on Forbes’ list of America’s Most Innovative Cities.
• Washington, D.C., a hub for defense contractors and biotech jobs, rated #3 by Kiplinger.
• Boulder, Colorado, the home of Ball Aerospace, Sun Microsystems, IBM, and many federal research laboratories, rated #4 by Kiplinger.
• Atlanta, Georgia, called the “sleeper tech” city by U.S. News & World Report  last fall, and located at one end of what Georgia is calling its “Innovation Crescent.” The Innovation Crescent is a 13-county area of Georgia that has a high percentage of technology companies and five Georgia state technical colleges.
• Huntsville, Alabama, the home of NASA’s Marshall Space Flight Center, and of Cummings Research Park, the nation’s second largest technology and research park, which is home to 225 companies boasting 23,000 employees.
• New York City, which is becoming a surprising new hub for tech startups, and where Mayor Michael Bloomberg argued last week that venture capital funding went up by 19 percent at the same time that it was dropping in Silicon Valley.
• Phoenix, Arizona, which has recently welcomed several tech and telecommunications firms. Phoenix is home to Honeywell’s aerospace division and electronics corporation Avnet.
• San Diego, California, which has become a hub for biotech, computer sciences, electronics manufacturing, software development, and telecommunications.
• Rochester, Minnesota, rated #6 by Kiplinger in part for its medical technology jobs.
• Des Moines, Iowa, rated #7 by Kiplinger in part for its agricultural technology jobs.
• Madison, Wisconsin, rated the #2 city for technology jobs by Forbes last June.
• Orlando-Kissimee, Florida, rated the #3 city for technology jobs by Forbes.
• Boise, Idaho, rated the #4 city for technology jobs by Forbes.

Sources used:

Avalos, George. “Bay area’s job market still brutal.” Contra Costa Times. May 31, 2010.

“Best cities 2010.” Kiplinger.

Censky, Annalyn. “HP to cut workforce by 3,000.” CNN Money. June 1, 2010.

Cowan, Claudia. “OTJH: tech jobs on the rise.” FOX News. May 11, 2010.

Dicolo, Jerry. “H-P to cut 9,000 jobs, spend $1 billion in restructuring.” The Wall Street Journal. June 1, 2010.

Light, Joe and Sheth, Niraj. “Silicon Valley rebound pressures tech hiring.” The Wall Street Journal. May 24, 2010.

Showley, Roger. “Relocation firms see increase in business.” The San Diego Union-Tribune. May 28, 2010.

“Tech hubs outside of Silicon Valley hiring.” Eweek. May 31, 2010.

Telljohann, Volker. “Europe-wide protests against Hewlett-Packard job cuts.” Eironline. 2/2009.

Van Buskirk, Eliot. “Mayor Bloomberg touts New York as next tech Mecca.” Wired. May 25, 2010.

Wolgemuth, Liz. “10 best places for tech jobs.” US News & World Report. Sept. 15, 2009.