TECHNOLOGY: Workforce numbers stayed relatively flat despite M&A activity
By NATALIE HOBERMAN, Staff Reporter
Los Angeles Business Journal
LOS ANGELES, Aug. 7, 2017 — The total workforce of the 25 largest telecommunications employers in Los Angeles County was virtually unchanged this year at 26,423 employees, despite a stir in the industry prompted by several mergers and acquisitions.
Norwalk, Conn.-based Frontier Communications Corp. entered the Business Journal’s list of largest telecommunications companies based on local employment at No. 4, pushing Verizon Communications Inc. down to No. 5.
That was due primarily to Frontier’s $10.5 billion acquisition of Basking Ridge, N.J-based Verizon’s wireline operations in California, Texas and Florida in April of last year, which shifted 2,000 local Verizon employees to Frontier, according to the two companies.
The company’s acquisition deal is one of several telecom mergers and acquisitions that have shaken up the industry.
There were 715 U.S. media and telecommunications deals in 2016, valued together at $125.4 billion, according to a report from PricewaterhouseCoopers.
There have been 487 deals so far this year, and the No. 1 company on the Business Journal’s list could be next.
AT&T Inc. – which topped the rankings with 11,500 employees at its downtown office, the same number reported last year – plans to buy Time Warner Inc. in a deal worth $85.4 billion. The Dallas-based telecom giant also acquired DirecTV in July of last year in a transaction valued at $48.5 billion.
“Los Angeles is becoming a key focal point on many fronts, and that is why I believe the overall industry is growing despite the fact that the core is consolidating,” said Jerry Power, executive director of USC’s Institute for Communications Technology Management.
The combined number of local workers at the listed companies decreased by roughly 300 employees to 26,423 as of mid-July, a slight decrease from the 26,744 reported last year.
Rounding out the top five on the list are Stamford, Conn.’s Charter Communications Inc. at No. 2 and Bellevue, Wash.-based T-Mobile USA at No. 3.
The consolidation of the major players in the industry hasn’t deterred smaller companies from making their presence known, however.
PwC Partner Todson Page said smaller companies can take a few avenues to keep up.
“Some will end up focusing on a niche consumer base or specific regional areas,” Page said. “Others will focus on creating unique and enriching user experiences faster than the telco giants, using their agility to respond more quickly to changes in consumer behaviors.”
Although Sherman Oaks-based Bel Air Internet took the No. 18 on this year’s list with 75 employees, the family-owned business has been experimenting with a new meaning of the word “wireless” since 2011. The company offers streaming and “pop-up internet” capabilities for live events including the Golden Globes and Netflix movie screenings in addition to its traditional carrier services.
This new approach has benefitted Bel Air in more ways than one.
“It allows us to do a lot of great public relations for the company because if companies trust us to do the Academy Awards, then doing their internet should be fairly mundane for us,” said Chief Executive Terry Koosed.
No. 17’s FreedomPop is another local carrier trying to disrupt the giants.The West L.A. startup offers free wireless services to its customers up to a certain point, then charges for additional usage. Most recently, the company announced it would launch a prepaid family plan and free family wireless bundle.
“FreedomPop has proven that new Internet business models work in the telecom space and has developed the technology to scale it globally,” Chief Executive Steven Sesar said in a statement.The company has 94 employees in its single office in Sawtelle.
CSI Electrical Contractors Inc., headquartered in Santa Fe Springs, added the most jobs out of all the companies over the past year other than Frontier. The electrical contractor, which offers wireless services to businesses, grew by 480 employees to 850, propelling it up three spaces from last year to the No. 7 spot.Ricky Huizar, CSI’s technology solutions manager, said the company’s growth is largely attributable to the firm’s solar and electrical segment.
In an otherwise stable industry list, there were a few notable changes.
Downtown-based TPx Communications, formerly known as TelePacific Communications, dropped three notches to No. 10, despite acquiring northeastern service provider DSCI in March 2016.
Ixia, which ranked No. 12 on last year’s list, was nowhere to be found this year as it was recently bought out by Santa Rosa-based Keysight Technologies for $1.6 billion.
Hawthorne’s CCS Presentation Systems Inc. made an appearance under its new name, LightWerks Communication Systems, at No. 22.