If there is one area in the U.S. that can absorb Dell's planned workforce cutbacks, it may be the Austin, Texas, area, one of the nation's hottest areas for tech jobs.
The region, which includes Round Rock, Dell's corporate home, employs about 120,000 people in the technology industry, and and the tech job market is growing at a rate of 5% to 6% a year, said Angelos Angelou, who heads AngelouEconomics, an Austin-based economic development and site location firm.
"This economy is on eight cylinders," said Angelou. He expects the Austin area to add 30,000 jobs overall this year, on top of the 27,000 to 28,000 gained last year.
On Monday, Dell said it was cutting its global workforce by a " small percentage," but wouldn't disclose a number.
At the time of last spring's release of its final annual report as a public company, Dell employed 113,000 globally, including about 40,500 in the U.S. The annualk report covered the fiscal year ending Feb. 1, 2013. Dell has since gone private.
Dell employs about 13,000 to 14,000 workers in Round Rock and the rest of the Austin area, said Angelou, who believes that the local economy job growth is good enough to absorb Dell employees impacted by the reduction.
Dell is the area's largest tech employer. "Michael Dell's name is synonymous with the growth of the technology economy in our region," said Angelou.
But Dell may lose that status in time.
For instance, one company that has increased its presence in the area is Apple, which broke groundon a one million square foot facility in Austin in late 2012.
Angelou said that Apple already employs about 4,000 in the area and plans to add another 3,600. That number is sure to grow beyond that. "I suspect Apple in the next decade will be by far the largest employer in Austin," he said.
Other tech companies with a strong presence in Austin include IBM, Applied Materials, and Freescale Semiconductor.
Angelou noted, though, that the region isn't dependent on a large tech manufacturers, as about $600 million is being invested every year in start-ups of all types. "This is a very entrepreneurial environment," said Angelou.
The Austin region is adding about 55,000 to 60,000 residents each year, and its population not stands at just under 2 million.
As a U.S. employer, Dell has been a consistent one over the last few years. The company has increased the number of its U.S. employees by 4,000 over its three last reported fiscal years. Its U.S. headcount, as a percentage of its overall workforce, has been in the 36-37% range over this period.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is pthibodeau@computerworld.com.
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