Apple dives deeper into Austin’s talent pool

This story was written by Lori Hawkins and appeared in the Austin American-Statesman.

Apple dives deeper into Austin’s talent pool

The tech giant’s California-style campuses, including a new engineering center, are adding thousands of jobs in Central Texas.

Apple Inc., which recently completed its expansive campus in Northwest Austin, has been discreetly building a core engineering team across town, fueling a new wave of growth in Central Texas.

The California-based technology giant is pulling back the curtain on its new engineering center, which sits on a bluff in Southwest Austin, near Capital of Texas Highway and Bee Caves Road.

Apple, the world’s largest computer electronics company, employs about 500 engineers at the seven-story Capital Ridge office building, Johny Srouji, an executive at Apple, told the American-Statesman.

The newly constructed 215,000-square-foot building has the ability to hold 1,000 workers, and Apple intends to fill it, he said.

“We have been quietly building out this team, which is one of our most important engineering groups,” said Srouji, Apple’s senior vice president, hardware technologies. “They play a very critical and integral role — they are designing chips that go into all the devices we sell.”

The Austin team, which the company began building several years ago, is now Apple’s biggest research and development group outside of its Cupertino, Calif., headquarters. When Apple decided to expand engineering work outside of Cupertino, Central Texas was the natural choice, Srouji said.

“The reason we came to Austin is there is a strong pool of talent,” said Srouji, who previously lived in Austin during stints at IBM and Intel. “There are lots of high-tech companies, and also the University of Texas.”

Apple’s growth in Austin

The Capital Ridge operation is just one piece of Apple’s multi-million dollar investment in Austin. Apple recently completed its sprawling 38-acre campus on West Parmer Lane in Northwest Austin.

The campus, which is responsible for running the company’s business operations for the entire Western Hemisphere, features seven limestone-and-glass office buildings with a combined 1.1 million square feet. The site includes restaurants; smoothie and coffee bars; a full-scale gym with saunas and a wellness center with services including medical, dental and eye care along with acupuncture and massage.

Work done at the site, known as the Americas Operations Center, includes finance, human resources, corporate sales, customer support, information systems and accounting.

Meanwhile, last year, Apple bought the nearby Riata Crossing complex, which has four buildings with 350,000 square feet of space. The company, which had been leasing it, has declined to say what work will be done there.

Apple is in line to receive $35 million in tax incentives from the city, county and state for its Austin expansion. To date, the company has received $10.5 million in incentives payments from the state-operated Texas Enterprise Fund, documents show.

The company says it has already created more than 6,000 jobs in Austin. add the amount of jobs created since the incentives deal. That makes Central Texas Apple’s largest U.S. hub outside of Cupertino.

The ripple effects are already being felt, economic experts say. Austin economist Brian Kelsey estimates that the Capital Ridge operation alone, with 500 engineering jobs, would result in at least $140 million in new earnings and create about 1,000 spinoff jobs.

“For every one new engineering job created at Apple, we could expect to see approximately two additional jobs created in the region,” Kelsey said.

Apple’s investment, Kelsey said, shows the depth of Central Texas’ tech roots, which can be traced back to IBM and chip makers like AMD, before Austin became known as a global software center and a top place to launch a startup.

“Austin’s tech credentials are well established, but most of the headlines lately have been about startups, access to capital, and the like,” Kelsey said. “Apple’s recent investment serves as a reminder that Austin is a key center of innovation for companies of all sizes, including one of the largest employers and most recognized brands on the planet.”

Austin ‘an ideal fit”

Apple began hiring building its engineering operation in Austin in 2010, with a 100-person team. Over the past several years, the group has been spread out at different locations.

Now, the Capital Ridge site will provide a single base for its 500-person team and give Apple room for a major expansion push.

The company said the group has a range of high-level hardware and software engineering expertise, but declined to give specifics. Jobs in Austin currently posted on the Apple website include CAD engineers, CPU microarchitecture engineers, physical design engineers and power integrity engineers.

“The chip development work they do goes into hundreds of millions of devices every year,” Srouji said. “If they miss a beat, we don’t ship.”

The Capital Ridge offers amenities similar to the Americas Operations Center, including a cafe, espresso bar and a wellness center that offers preventative and urgent care, as well as acupuncture, massage and physical therapy. It also has a fitness center with group and private classes and terraces for Friday afternoon beer bashes.

Roger Kay, an analyst with Massachusetts-based Endpoint Technologies Associates Inc., said building and retaining a world class team in Austin is critical to Apple’s continued growth.

“They have an almost infinite need for really good engineers, and the supply is limited,” he said. “They’ve got plenty of money, but they have fished out Silicon Valley pretty much entirely. For Apple to find more talent, they have to reach out further afield.”

Austin, Kay said, is the right place to mine for talent.

“Thanks to Dell, AMD, NXP and Samsung, all that very specific talent that Apple needs resides in Austin,” he said. “It’s an ideal fit.”

Documents: Apple has created over 2,000 Austin jobs since 2012

This article was written by Lori Hawkins and appeared in the Austin American-Statesman.

Documents: Apple has created over 2,000 Austin jobs since 2012

Tech giant is on pace to meet hiring goals it promised in exchange for millions of dollars in incentives.

Technology giant Apple Inc. has created more than 2,000 new jobs in Austin since 2012 and remains on track to meet the Central Texas hiring goals it promised in exchange for millions of dollars in public incentives, according to documents filed with the city of Austin.

Apple, which disappointed investors last week with troubling financial information, is set to receive $35 million in tax incentives over the next several years from the city of Austin, Travis County and the state of Texas for an expansion of its operations in Central Texas.

The expansion is expected to generate a $304 million capital investment in the Northwest Austin campus, which will include seven new office buildings with 1 million or more square feet of space.

Under the terms of the incentives package, which was signed in March 2012, Apple agreed to create more than 3,600 new full-time jobs in Austin in 10 years while retaining at least 3,100 existing full-time jobs year over year. The average wage for those new jobs is to be $54,000 a year in the first year of the expansion and will stretch to $73,500 in the 10th year, according to the incentives agreement.

In 2012, the Austin City Council approved $8.6 million in tax breaks for Apple in exchange for establishing its Americas Operations Center here. Apple also is in line for between $5 million and $6 million from Travis County.

Apple, the world’s largest consumer electronics company, said last year that it was well ahead of hiring projections. A more recent report — filed March 10 by Terry Ryan, Apple’s senior tax manager — indicates that the company continues to outpace the requirements.

As of Dec. 31, the total number of full-time Apple jobs in Austin was 5,102, according to the company’s report. That includes 2,089 new jobs that been created since 2012, according to the report — an average of more than 550 a year. (The agreement calls for Apple to create 300 new jobs by the end of 2016.)

In addition, there were 904 contract employees as of the last day of 2015, the report said.

If Apple ultimately reaches its hiring goals, it will become the second-largest technology employer in Central Texas, behind only Dell Inc.

In a written statement, Apple said: “We’re incredibly proud that Apple’s innovation supports tens of thousands of jobs across a wide range of industries in Texas. Apple started in Austin 24 years ago and we’ve grown to support over 6,000 employees in a variety of roles from sales, operations and finance to our online store, engineering and the best customer support organization in the world. We also partner with a number of companies in Texas to source materials and components for our products, including the manufacturing and assembly of Mac Pro just down the road. Austin is a special community and we look forward to continuing to grow and invest here.”

Apple’s new Austin campus, at West Palmer Lane and Delcour Drive, is responsible for running the company’s business operations for the entire Western Hemisphere. In addition to the limestone-and-glass office buildings, the 38-acre site includes restaurants; smoothie and coffee bars; a full-scale gym with saunas and a wellness center with services including medical, dental and eye care along with acupuncture and massage.

The campus, which is scheduled to be completed this year, employs workers in finance, human resources, corporate sales, customer support, information systems, accounting and other administrative roles.

The new campus is just part of Apple’s growth plan in Austin. Last year, the company bought the nearby Riata Crossing complex, which has four buildings with 350,000 square feet of space, which the company had been leasing.

It also signed a lease for the entire 216,000-square-foot Capital Ridge office building under construction in Southwest Austin. The company isn’t saying what work will be done at the various locations.

Apple already has accepted two sizable payments from the Texas Enterprise Fund, which was created in 2003 to attract new jobs and investment to the state. The state gave the company $5.25 million in September 2012 and another payment of the same amount in December 2015. The total award from the Texas Enterprise Fund will reach $21 million over a decade.

Jon Hockenyos, an Austin economist, said the types of jobs Apple is creating at the campus are a key component to the region’s economy.

“These are the equivalent of manufacturing jobs in the old days — they’re jobs that pay a solid wage,” he said. “They provide solid middle-class incomes that sustain families. They’re the kind of jobs any city wants to see being created.”

Hockenyos said Apple’s recent woes — the company last week posted its first quarterly revenue decline in 13 years — are unlikely to affect its Austin operations.

“They’re facing some challenges, but a lot of what Apple does here is core to its business — things they have to do to continue to stay in business,” he said. “Because of that, the issues they face probably won’t be felt here as much as they might in other places.”

In fact, Austin economist Brian Kelsey said, Apple could provide stability to Austin’s economy if the technology industry were to experience a downturn.

“We’re in the longest streak of economic expansion since the late 1990s, but Austin is still primarily a startup town,” Kelsey said. “That’s important to keep in mind because entrepreneurship can be a shaky foundation for economic development when the business cycle starts to turn.”

Large players operating like Apple aren’t immune to a global slowdown, Kelsey said. “But they can provide some stability, making Austin more resilient to changing conditions,” he said.

Government officials shouldn’t be too concerned with Apple’s recent earnings report, said Patrick Moorhead, president and principal analyst at Moor Insights and Strategy.

Apple might have frustrated investors, but it’s “way too early to be concerned” in Austin, Moorhead said.

“Apple, unlike other companies, didn’t invest too far forward related to its commitments in Austin. In fact, given their profitability and revenue base, they may not have enough space for everything they need to do,” Moorhead said.

If profits are most important, Moorhead said, then “Apple should consider moving even more functions to Austin from expensive California.”