As unemployment soars to 14.7%, even engineers fall prey

Fully 25% of FierceElectronics survey respondents said their companies had layoffs or furloughs due to COVID-19. (Getty Images)

Heartbreaking jobless numbers for April created a historic U.S. unemployment rate of 14.7%, an increase of 10.3 percent points over March, as the impact of COVID-19 continued. The number of unemployed persons rose by 15.9 million to 23.1 million in April, according to the Bureau of Labor Statistics.

The tech sector has done relatively better than many others, especially the hardest-hit sectors of leisure and hospitality and the retail trade.  But engineers in the electronics field have indeed been affected as well because they work across many sectors, not just specifically in semiconductor manufacturing and the design of new chips, sensors and components.

That old adage, “there will always be a job for an engineer” has been called into question as never before.

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Fierce Electronics survey results

For readers of FierceElectronics, layoffs and other adjustments to the impact of COVID-19 have also been pronounced. According to preliminary results in a FierceElectronics survey on the impact of COVID-19, 25% said their companies have been affected by furloughs or layoffs. Also, 27% said their companies have imposed pay cuts or pay freezes.  Fully 13% said bonuses were canceled.

The FE survey also found that 30% said their companies had put open positions on hold. And nearly 25% said they face budget cuts.

The survey of 334 respondents also showed how companies are moving forward with protections against COVID-19 and adjustments to keep functioning.   Steps include cancellation of a live event or participation in one (47%), work hours shortened (9%), corporate bans on travel (69%), work from home mandates (81%) and requirements to wear masks or other protection while at work (47%).

As an indication of how widespread engineering layoffs have been, FierceElectronics obtained an online job referral list of nearly 1,200 recently laid off engineers and designers that includes people of all ages and backgrounds who are seeking work.  They include young workers with master’s degrees in engineering laid off from their first jobs at auto manufacturers. Others are from mainstream tech companies like Apple, HP and IBM. 

There’s no indication how widespread the layoffs have been for any of the companies on the list, however.  While FE reached out to many on the list, none wanted to be quoted for a story.

Many tech companies are still hiring. CNET reported that Apple, Amazon and Microsoft each listed 2,000 open jobs on their respective sites. 

Companies that rely heavily on electronics in various forms are adapting.  In one example, Carrier Global reported earnings on Friday that include aggressive cost actions such as a 40% to 50% reduction in planned capital spending. Capitol spending reductions will affect planned ERP and automation programs.

The HVAC supplier reported sales of $3.9 billion, a 10% reduction in first quarter sales compared to year earlier. The company makes air conditioners and has had to distance workers and place Plexiglas barriers between them on its assembly lines. ”There’s no doubt it’s caused us some efficiency issues,” ICEO David Gitlin said in an interview on CNBC.

Carrier also sees a promising future in smart buildings that emphasize ventilation systems that can filter out contaminants.

At Raytheon Technologies, CEO Greg Hayes said in an earnings call on Thursday that an unspecified number of workers have been furloughed at corporate offices, across its commercial businesses and in factories.  "I expect there will be further reductions," he added in the call, according to a Seeking Alpha transcript. 

Raytheon Technologies has 195,000 employees across four business units: Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense.  The company was formed April 3 through a combination of Raytheon and United Technologies and is based in Waltham, Massachusetts. Otis and Carriers were spun off in the merger.  The combined United Technololgies and Otis and Carrier at the close of the first quarter had net sales of $18.2 billion, down 1% from the prior year. 

RELATED: COVID-19 cuts into self-driving chips, on top of crushing car sales

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