The Austin Chronicle

Naked City

Austin @ a Loss

By Kevin Fullerton, June 15, 2001, News

When talent headhunters are out scrounging for employment themselves, is it time to accept that the New Economy has taken Austin for a long walk off a short dock? Thursday, Volt Information Sciences Inc., a national staffing services company that's operated a branch office in Austin for more than 30 years, announced that its net income for the second quarter of 2001 was less than 40% of what it had been during the same period in 2000.

The company reported that the main cause of its misfortune was a "significant deceleration" in commercial and light industrial placement, although Volt's "telecommunications solutions" division has also been stalled by new broadband companies' inability to raise funds. In Austin -- where in April alone 6,000 jobs were lost in the manufacturing and goods-producing sectors, along with another 2,000 jobs in equipment manufacturing -- the market for placement has all but dried up, leading to layoffs at Volt, according to a company source. Profits are also down 60-70% at other Austin recruitment firms, another source confirms, and some of them are tanking.

Against that backdrop, the Greater Austin Chamber of Commerce convened its biannual powwow of major employers last Wednesday to talk not about the present economic malaise that has put so many out of work, but about ways to train and recruit employees for the golden days ahead. Mayor Kirk Watson praised the nearly 500 attendees at the Greater Austin@Work conference as leaders who "get" that the end of the boom hasn't stopped Central Texas' evolution to a knowledge-based economy.

Two years ago, it seemed that many industry execs had forgotten the meaning of the term "economic cycle," but Wednesday the term was used repeatedly, almost lovingly, as a bond of assurance from executives to public officials: Okay, so maybe the good times don't last forever, but we're all going to enjoy working together to restore our prosperity.

"We've been through this before," said John Mainey of Solectron Texas, one of the area's largest employers, about the downturn. "But it's about how you prepare for the growth that will appear again." Preparation, according to general consensus at the confab, means encouraging local school districts and community colleges to produce more tech-savvy worker ants. Some local classrooms, one participant noted, "still look like Horace Mann classrooms of 200 years ago."

Employee union representatives don't get invited to the Austin@Work summit, probably because they would upset the public-private spirit that blows through the event by noting the irony of talking job training one year, and layoffs the next. At the end of the afternoon's brainstorming sessions, industry execs announced a renewed commitment to recruiting teenagers through internships and promoting industry-specific skills training in public schools. Austin Independent School District superintendent Pat Forgione said that AISD intends to partner with UT to increase teachers' science and math acumen, and hopes to negotiate with the state to convert Chapter 41 money the district now has to send to less wealthy schools into business scholarships instead.

Not all of Austin's major employment arenas are as vulnerable to the undulating rhythms of global economics as the microchip, computer, and electronics industries -- service-oriented businesses, primarily those in wholesale and retail trade, are still offering thousands of new jobs. But since the high tech sector has become one of the pillars of the local job market, perhaps someone should have suggested that industry back up its promises to support the local work force by committing to hold onto workers even when the businesses aren't profitable.

Sandy Dochen, who chairs the Capital Area Workforce Development Board, says he hadn't heard any sentiments like that expressed this year -- just more efforts to promote job fairs. "There's a lot of things we could still be looking at," said Dochen.

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