SanDisk, Symantec Workers Lead Silicon Valley in Profit Gains

June 13 (Bloomberg) -- SanDisk Corp. and Symantec Corp. are leading their Silicon Valley peers in boosting profit per employee, as technology workers learn to do more with less.

SanDisk earned $684,381 more from each worker last year than the prior year, while Symantec added $430,453, according to Bloomberg data measuring the most recent fiscal year.

About half of the companies in a Bloomberg regional index had more profitable workforces last year, helped by job cuts and the start of the economic recovery. Silicon Valley lost about 90,000 jobs during the worst of the slump. The remaining workers had to take on more of the burden, propelling productivity to its highest level since the dot-com boom in 2000.

“You can get your people to work harder for an extended period of time, but the question is, is that sustainable?” said Tracey Grose, vice president of research and development for Collaborative Economics Inc., a Mountain View, California-based consulting firm.

Productivity rose 3.8 percent between the second quarters of 2008 and 2009, according to an annual survey by Joint Venture: Silicon Valley Network and Silicon Valley Community Foundation. As companies begin to see orders rebound, they eventually have to bring workers back.

“When companies start turning around, they will take on temporary help, and then they’ll start hiring full-time positions,” Grose said.

Job Cuts

SanDisk, a maker of Flash memory based in Milpitas, cut at least 10 percent of its workforce in late 2008, part of an effort to reduce operating expenses to $800 million or less.

Like the housing market, the flash-memory industry had a supply glut. That caused prices to crash, forcing companies to take a loss on every component that went out the door.

“These guys were losing probably close to one dollar a part at the end of 2008,” said Joe Unsworth, an analyst at Stamford, Connecticut-based Gartner Inc. “They were absolutely hemorrhaging cash.”

Prices recovered after the industry cut capacity and worked through the excess inventory, he said. SanDisk has been profitable since the second quarter of 2009. On an employee basis, the company earned $127,123 last year, up from a loss of $557,258 in 2008.

Symantec, the world’s biggest maker of computer-security software, also cut jobs during the recession, reducing its workforce budget by 4.5 percent at the end of 2008.

Consumer Rebound

At the time, corporate customers were curbing security spending. Sales at Mountain View-based Symantec tumbled for four straight quarters, through September of last year.

Customers bought consumer products at a faster pace than business software, helping Symantec pull out the slump, said Chief Financial Officer James Beer. Per worker, net income was $41,035 last year, compared with a loss of $389,418 the previous year.

Google Inc., EBay Inc. and Yahoo! Inc. also boosted per- employee profit last year. Google employees had some of the region’s highest numbers, accounting for $328,734 on average. Oracle Corp., at $65,035, and Hewlett-Packard Co., at $25,197, were both little changed from the prior year.

Thirty-five companies in Bloomberg’s index of 78 Bay Area stocks saw profitability per employee drop last year. And 20 lost money -- often because of writedowns and reorganizations. Lam Research Corp. and JDS Uniphase Corp. ranked at the bottom of the list.

Wider Loss

At JDS, a Milpitas-based maker of fiber-optic equipment, the loss per worker widened to $216,600, from $3,056 the previous year. It was hurt by one-time charges, including the writedown of an acquisition. The timing of its fiscal year didn’t help because it ended last June, before the economic recovery got under way.

“Customers were cautious on spending on telecom equipment,” said Jim Monroe, a spokesman for JDS. Things have improved since last year, he said. Bookings last quarter reached the highest level in two years.

Lam was hurt when memory producers -- such as SanDisk -- scaled back production plans during the slowdown, said Carol Raeburn, a spokeswoman for the Fremont company.

During the fiscal year that ended last June, Lam had a loss of $111,453 per worker, down from a profit of $115,618. The company completed its purchase of SEZ Holding AG in March 2008, not long before the recession deepened. The company had to write down the value of the business, eating into profit. Lam also cut jobs as it integrated SEZ.

“The biggest reason for the loss was a restructuring,” Raeburn said.

The memory business has since rebounded, helping Lam post record shipments last quarter. Sales of smartphones, netbooks and tablet computers such as Apple Inc.’s iPad have helped.

“It’s the whole consumer electronics category that’s driving this demand,” Raeburn said. “It just shows you how fast things can change from the doldrums.”