Wireless Jobs Vanish

Do you know anyone who doesnt have a smart phone? Hard to believe that you do. Or, perhaps more realistically, anyone who hasnt gotten a new one in the last year? Hard to think of anyone in either category?

Agreed. If not actually true, it sure feels like the entire civilization is, as The Who once sang, 'going mobile.'

So that makes the employment stats particularly painful. If the US can not add jobs in one of its fastest growing, most technologically advanced industries, hope must surely be fading.

Not surprisingly, productivity enhancements tied to the very technology being sold has enabled manufacturers and sales organizations to manage the growth without increasing jobs. Economic theorists believe that these advances will eventually produce new businesses and jobs. The question is what they mean by 'eventually.' If you are out of work and having trouble paying the mortgage, that theoretical promise is cold comfort. In the past, government and business would invest in training and future growth. But, we have become a very now-focused economy. Whatever the current product demand, the concern is that refusal to invest in the future now may sap growth later.JL

Anton Troianovski reports in the Wall Street Journal:

The U.S. wireless industry is booming as more consumers and businesses snap up smartphones, tablet computers and billions of wireless applications. But for the industry's workers, the story is less rosy. In May, on the heels of a record year for industry revenue, employment at U.S. wireless carriers hit a 12-year low of 166,600, according to U.S. Labor Department figures released earlier this month. That's about 20,000 fewer jobs than when the recession ended in June 2009 and 2,000 fewer than a year ago.

While the industry's revenue has grown 28% since 2006, when wireless employment peaked at 207,000 workers, its mostly nonunion work force has shrunk about 20%.
The disconnect between employment and industry growth reflects the broader head winds lashing the U.S. job market, as consolidation, outsourcing and productivity gains from new technology and business methods combine to undermine job growth.

At wireless carriers, leaps forward in smartphone and network technology haven't generally required increases in the call-center workers and salespeople that make up much of the wireless-telecom work force.

Those advances do show up, however, in skyrocketing productivity statistics. In 2009, the latest data available, the output per hour of wireless-carrier workers jumped 24.3%, more than in nearly any other service industry, according to a Labor Department report in May. Since 2002, output per hour in the industry has nearly tripled.

To be sure, the wireless boom is creating jobs in other industries and occupations, such as software development, publishing and media. Search giant Google Inc. has said it is generating $1 billion a year in mobile-related revenue and will hire more than 6,000 people this year, including many to work on mobile products. Start-ups such as Twitter Inc., Foursquare Labs Inc. and Flipboard Inc., meanwhile, continue to grow at a rapid clip.

"Even with all of the growth of more cellphone users and the like...the industry has been able to do that with a lot less people," said Robert Atkinson, president of the Information Technology & Innovation Foundation, a Washington think tank. It's the "ecosystem that is on top of that core network" that "is going to be a growth engine," he added.

That's cold comfort for the industry's workers, especially in the hard-hit customer-service field. The number of customer-service workers at wireless carriers dropped to 33,580 last year from 55,930 in 2007, according to the Labor Department. "It used to be you had to scale your customer-care resources linearly with the number of customers you had," said Dan Hays, a telecom consultant. "We don't do that anymore."

The new efficiencies are evident at Sprint Nextel Corp., where executives pushed hard in recent years to offer simpler service plans, simpler phones and a streamlined activation process to cut the volume of customer-service calls.

Introducing smartphones running Google's Android operating system played a role in reducing calls, said Sprint customer-care chief Bob Johnson. Android "is a little bit easier to use, it's more intuitive, and therefore it creates less questions," Mr. Johnson said.

Partly as a result, Sprint was able to pare back its number of call centers to 44 last year from 74 in 2007 and its total head count to 40,000 from 60,000, Sprint executives said.

Bob Roche, vice president of research for CTIA, a wireless-industry trade group, said the government's figures may understate the number of people working in the industry. The group's own survey says wireless providers employed about 250,000 at the end of last year—up by about 65,000 from a decade ago but down about 16,000 since the end of 2007. In 2010, the number of connected wireless devices hit a high of more than 302 million, up 19% since 2007, it said.

The wireless arms of phone giants AT&T Inc. and Verizon Communications Inc. have kept their head counts nearly flat over the past few years, the companies say, even as their wireless revenue grew to $122 billion at the end of last year from $100 billion in 2008.

"We've been able to keep the wireless work force stable (instead of up) because of productivity improvements," a Verizon spokesman said in an e-mail. He cited such efficiency moves as offering Apple Inc.'s iPhone for sale online before bringing it to Verizon's retail stores earlier this year.

An AT&T spokesman cited gains in productivity and the fact that more customers were going online to choose their phone and pay their bills, reducing the need for more call-center workers and salespeople.

Consolidation has been a big contributor to the industry's productivity growth. The impact of Verizon's January 2009 acquisition of Alltel Corp., for example, is still being felt. Last month, Verizon closed what used to be an Alltel call center in Virginia Beach, Va.

More layoffs are expected if the government approves AT&T's acquisition of Deutsche Telekom AG's T-Mobile USA, the fourth-largest U.S. carrier. AT&T executives have said that cost savings from combining the companies' retail chains, advertising and back-office systems are a big part of the deal's rationale.

Cellphone companies also have been outsourcing customer-service and network-management jobs. Sprint in 2009 transferred 6,000 workers to Telefon AB L.M. Ericsson as part of a network-management outsourcing deal. Of those employees, 800 moved to other parts of Ericsson, while another 500 left or were laid off, Ericsson said.

High-speed wireless carrier Clearwire Corp. in recent months moved about 1,400 of its 3,300 employees to outsourcers Ericsson and TeleTech Holdings Inc.