Meltdown in high-tech industry may be ending

SAN FRANCISCO — About 12 percent of the nation's high-tech jobs have evaporated during the past two years, but the meltdown appears to be in its final stages, according to an industry report to be released today.

After wiping out 540,000 jobs in 2002, high-tech employers are on pace to lay off another 234,000 workers this year, based on figures compiled by the AeA, a trade group formerly known as the American Electronics Association.

Based on the AeA's estimates, the high-tech industry will end this year with about 5.73 million workers, down from 6.5 million employees at the end of 2001.

The 2002 contraction included 146,000 job losses in the software sector, the first time employment in that high-tech niche has fallen in the seven years that AeA has been compiling its state-of-the-industry report.

California, long a high-tech magnet, accounted for 123,000 job losses in 2002, or 22 percent of the national total, the AeA said. The study didn't provide a state-by-state breakdown on the 2003 job cuts.

As hard hit as it was, California ended 2002 with 994,700 high-tech jobs — more than twice as many as Texas, the nation's second largest high-tech hub with 478,900 employees.

Wyoming was the nation's most sparsely populated high-tech state, with 4,357 employees in the industry. Wyoming added 453 high-tech workers in 2002, joining Montana as the only states where the industry's payroll increased. Montana gained 68 high-tech workers in 2002.

Despite its woes, the high-tech industry remains one of the nation's biggest private-sector employers and continues to pay some of the best wages, with its workers earning an average of $66,300 in 2001, the most recent year for which the AeA had compensation data.

The high-tech industry's payroll totaled $433 billion in 2001, accounting for about 11 percent of the nation's wages, the AeA said.

The AeA depicted this year's work force erosion as an encouraging sign, noting that the projected job losses represent a significant improvement from the 2002 purge.

With the improving economy helping boost corporate spending on computer hardware and software, the high-tech industry should begin adding jobs during the spring, predicted William Archey, the AeA's president and chief executive officer.

"There isn't going to be a massive infusion of new jobs right away because companies have gotten used to operating leaner and meaner," Archey said during an interview.