Big Tech's Hiring Binge Has Small Impact on Jobs

Google hiring spreeEarlier this year, Google (GOOG) made a huge splash when it announced plans to embark on its biggest hiring binge in its short history. Also hiring are other tech giants such as Apple (AAPL), IBM (IBM) and eBay (EBAY).

That's good news for the flailing U.S. jobs market, right?

Not exactly.

Help Wanted: Just Not Here

Unfortunately, the ability of these large firms to affect the jobs market in the U.S. will likely be minimal. That's because many of the positions being created are for openings overseas.

Earlier this month, IBM announced plans to hire 1,000 workers over the next four years ... in Costa Rica. Big Blue continues to be a large employer in the states -- in 2008, 115,000 of the company's 400,000-plus workers were based in the U.S. But that percentage is dwindling in the U.S. and increasing overseas.

Also hiring are Apple and eBay -- both of which reported better-than-expected quarterly earnings. But they are vague about where these employees will be based. Emerging tech giants such as Facebook (which, at last count, employs more than 2,000) and Twitter (with a staff of fewer than 500) also declined to discuss their hiring plans in detail.

Are You Willing to Relocate for a Job?

Apple's growth plans illustrate why growing employee head counts aren't helping the plight of America's job market, where unemployment stands at 9.2%.

As of Sept. 25, 2010, Apple employed 46,600 full-time equivalent employees and an additional 2,800 full-time equivalent temporary employees and contractors. About 26,500 of those workers were in Apple's retail division, up from 16,500 full-time equivalent jobs a year earlier, according to SEC filings.

Head count will certainly rise this fall if Apple launches the iPhone 5. But like other U.S. companies, Apple sees better prospects for growth outside the United States. Right now the company has four stores in China, not including the fake one that recently shut down, of course. The company plans to open 40 new stores in fiscal 2011, including 28 outside the United States.

More Work, Less Help

Another reason these companies are not hiring en masse in the U.S. is because they don't have to. As the economy slowly emerges from its worst decline since the Great Depression, companies have learned to do more with less.

A Brookings Institution report recently pointed out that incomes rose 23% from 1975 to 2009 while work hours increased 26%. An assessment by the International Monetary Fund summarized the issue in a nutshell: "Employers responded to the crisis mostly by laying off workers rather than by shortening the workweek, and the recovery has featured a relatively rapid increase in productivity but sluggish job creation, for reasons not yet well understood."

Workers are paying the price for this in the form of lower wages as geographical boundaries become increasingly meaningless.

"Even if the economy were to immediately begin producing 600,000 jobs a month -- more than double the pace of the mid-to-late 1990s, when job growth was strong -- it would take roughly two years to dig ourselves out of the hole we're in," according to a March 2010 Atlantic article. "But the U.S. hasn't seen that pace of sustained employment growth in more than 30 years."


Motley Fool contributor Jonathan Berr doesn't own shares of any of the companies listed. The Motley Fool owns shares of Google.

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It's all about GREED.....Corporate Greed..Individual Greed. It's no secret that business is playing on the "recession" for consumer sympathy to pretend they "need" to reorganize and shed jobs to survive. Sad, however, that the general public can be brainwashed so easy. Companies are out to increase profit at ALL costs and if they don't have the profit in sales, the next option is to what? you got it..decrease expenses like wages and jobs to pad their bottom line. Unfortunately, disposable income is impacted so we can't buy their products which leads to a downward spiral . The CEO gets his/her bonus and severence as they leave to do more damage elsewhere and it's up to the next person to clean up the mess. (Sounds like our country). We need to research these companies that refuse to provide information on where their jobs are going and where they spend their profits? If it's not here in the US, we need to unite together and boycott their products until they return jobs HERE in AMERICA. (What a novel idea!).. For every dollar u spend on a product, it's like casting a vote for them. I no longer have faith in the American public for many don't have the rationale to see the big picture. I mean just look at the deficit government mess now..What is Obama thinking? I don't see a benefit for the average middle working class here at all? And the Republican's antics to have a tantrum every time someone proposes that they (FINALLY) pay their fair share of taxes without the lobbyist loopholes etc. Those who voted for the last President (AND OMG< not only once to start the mess but twice to finish us off)...well u asked for it...you got it..! God save us.

August 01 2011 at 2:33 PM Report abuse rate up rate down Reply
Frank

It's not just about creating jobs, it's the quality of those jobs. Companies continue to have (when they are offered) part time/temp, low wage, no benefit jobs with which you can not support yourself let alone a family. This will also continue to effect the housing market as more and more people become delinquent ultimately leading to foreclosure.

July 29 2011 at 9:29 AM Report abuse rate up rate down Reply
Iselin007

I was told in the past that the head of a labor division decides which numbers get reported. What makes matters worse is companies will use the state labor web sites to advertise jobs then discriminate against applicants! Workforce for who certainly is more accurate a statement!

I even reported the incidents I came across to the unemployment office. Imagine a rep for a company calling you on the phone to ask "How old are you" Gee I thought as long as your over 18 it was none of their business!

July 28 2011 at 10:03 AM Report abuse rate up rate down Reply
Iselin007

Look it may make a for a pretty Excel spread sheet but unemployment percentages just don't come out that even in marching goose steps up or down unless their manipulated.

July 28 2011 at 9:53 AM Report abuse rate up rate down Reply
Iselin007

It's funny how many claims don't get processed on purpose or due to the lack of staff. Suddenly the numbers pile up an get pushed into the next permissable slot. I never saw such a linear decline or increase in unemployment percentages in such orderly fashion before.I mean really companies don't release people in such perfect order as the charts or tables show.

Examble: 9.8, 9.7, 9.6,9.5, 9.4 to 9.1 then it reverses (9.1, 9.2, 9.3, 9.4,9.5,) Suspicious yet hmm?

July 28 2011 at 9:40 AM Report abuse +1 rate up rate down Reply
Iselin007

Call the 398,000 claims the 16th week of over 400,000 because they will likely be rivised over 400,000 an because the BLS rounds off making them 400,000 any way!

July 28 2011 at 9:26 AM Report abuse rate up rate down Reply
Iselin007

Hiring binges you say well that may occur overseas in China but not in the USA unless bodyshops got a fresh truckload of improper non immigrant visa staff in the pipeline ect.

July 28 2011 at 9:22 AM Report abuse rate up rate down Reply
Iselin007

The weekly US unemployment claims came out at 398,000 but in a few days they will be revised upward most likely. Seems when out of the camera spotlight the numbers grow larger like mushrooms in the dark.

July 28 2011 at 9:17 AM Report abuse rate up rate down Reply
Setanta

uuuuuuuuh,is this all part of THEIR jobless recovery ?

July 28 2011 at 9:10 AM Report abuse -1 rate up rate down Reply
shidelera5

5 years exp. to be an intern? Whats up with that AND its pays the same as cleaning shitters in the state park (a job i cant get btw, because they are save for recovering drug addicts and "dissadvantged groups? Well, I know someone that will become "disadvantged" if jobs dont start picking up.

July 27 2011 at 8:59 PM Report abuse +1 rate up rate down Reply