Underwriters Laboratories, a Chicago-based not-for-profit company that performs regulatory testing on electronic products, is relocating an internal software unit from its Research Triangle Park facilities to Northbrook, Ill. And a Raleigh-based company, Cisys, has cut workers as a result of losing UL as a client.
UL spokesman Glenn Gillen declined to indicate the reason for the move. Gillen said about 20 software developers work in the local UL division, and several of those workers are contractors. He confirms that the in-house workers would most likely be transferred to Northbrook while the contract workers will simply be cut.
A rumor began circulating throughout the Triangle late last week that UL was scaling back operations at its RTP facility, but Gillen said that the software unit is the only division at UL that is relocating.
As a result of the UL move, Cisys, an Internet consulting and software development firm, was forced to lay off a number of software developers — sources say the number is less than 10 – who were working on-site at the UL lab.
“Cisys is one of our vendors, and with the relocation of that group (we) anticipate the severing of our relationship with them,” Gillen says.
Cisys Chief Executive Officer Jim Saunders confirmed to Local Tech Wire that fewer than five programmers were “let go” on Friday. At least one senior executive was laid off on Monday.
Former Cisys employee anticipated cutbacks
Robert Williams, a former software developer for Cisys, says he was not surprised when the news came down from company officials last Friday at 5 p.m. that the cutbacks were immediately effective.
“I expected that some people would be laid off eventually,” Williams says. “We had a drop in work available, and that’s just one of those tiny issues in a smaller company that can affect its operations. But they’ve indicated that if there is more work they will hire us back.”
Williams says that in recent weeks Cisys implemented mandatory pay cuts as a cost-cutting measure aimed at retaining its staff, and that the pay difference was given back after about two weeks. “They did the best they could to keep people on board,” Williams says.
In the meantime, Williams says he had enrolled in a Microsoft Certified Systems Engineer program and hopes to further his IT education in anticipation of a return to a healthy IT market.
UL’s presence in RTP
In June 2001, UL opened a NEBS Environmental Facility that focuses on the Network Equipment Building System, a set of federal production requirements for telecommunications equipment. The RTP facility tests the equipment, much of which is manufactured by local telecom giants like Nortel Networks and Cisco Systems, under high-stress situations. The facility it able to simulate the intense shaking that an earthquake produces, a direct lightning strike, extreme heat and humidity, airborne contaminants, fires, voltage surges and electromagnetic interference, to name a few.
But the focal point of the facility is the earthquake machine, a seismic-vibration table that that can simulate an earthquake measuring 7.0 on the Richter scale, and samples weighing as much as 5,000 pounds.
Gillen says that telecommunications equipment manufacturers continue to be some of UL’s largest clients, and that they are still testing products at UL labs in spite of the lack of market demand for switches, routers and other telecom equipment.
James Kelleher, an analyst with New York-based Argus Research, says that testing labs, such as UL and Singapore-based Flextronics International, which operates a 10,000-square-foot compliance laboratory in Youngsville, will continue generating business from the equipment manufacturers despite the financially strapped market.
“When you look at their big customers, the Nortels, the Ciscos and the Alcatels, they still account for 90 percent of the business being done in the outsourcing market,” Kelleher says. “And those companies are still spending money on developing new equipment, which will have to be tested. The market is not over the top like it was in the late 1990s, but I think it is a little more stable now than it has been.”