Job losses leave Silicon Valley facing a long road back

Collapse is worst in California since the Great Depression

March 23, 2003|By Joseph Menn | Joseph Menn,SPECIAL TO THE SUN

Michael Rolle, a veteran of Oracle Corp. and Cisco Systems Inc. who trained at the Massachusetts Institute of Technology and Stanford, has started a new job: umpiring junior varsity high school softball for $20 a game.

It's not the direction he thought his career would take when his last serious contract ran out two years ago. Since then, Rolle's only stint as a software engineer has been at a start-up that laid him off after one month.

"I see everybody spending all their days going to networking meetings, calling their friends, doing all the various things people tell you to do, and after months of that, they're still looking," said Rolle, 57, of Cupertino, Calif. "Why work so hard?"

With about $40,000 in credit card debt, Rolle would need to officiate five games a day to stay even. That's not likely, so he figures he'll have to file for bankruptcy protection in about four months. But he might as well do something he enjoys. Umpiring is "good exercise, it's fun, and you get to be with kids," he says.

As the Silicon Valley cave-in enters its third year, thousands of Michael Rolles are emerging, pinching pennies instead of responding to every Internet job posting. Thousands more keep slogging away, attending workshops on resume writing and interviewing skills.

Many others have changed careers or left the Valley. Santa Clara County's population fell 14,564 in 2001, the most recent year tallied by the California Department of Finance. That's the biggest net exodus since at least 1970.

Not many high-tech casualties were shocked this month when the state released figures showing that officials had severely underestimated Silicon Valley's job losses since 2000.

"The pain people were feeling was based on reality, as opposed to the junk the state was feeding us," said Richard Carlson, chairman of forecasting firm Spectrum Economics Inc. in Mountain View, Calif.

The low-ball statistics, based on sampling, had gauged Santa Clara County's losses at about 115,000 jobs. The more accurate figures peg the damage at 175,000, about 16 percent of all jobs in the county outside farming. For San Francisco and Silicon Valley as a whole, the losses added up to 275,400, which is 13 percent of the nonfarm total.

That means Silicon Valley's losses are worse than Los Angeles' after the aerospace industry decline that began in 1990. In Los Angeles' two most desperate years, 400,000 jobs disappeared, but they amounted to 10 percent of the nonfarm whole.

Silicon Valley's fall is unmatched in California history since the Great Depression, when some regions lost 25 percent of their jobs, according to Stephen Levy, director of the Palo Alto, Calif.-based Center for the Continuing Study of the California Economy. What's more, the new statistics show that the number of people working in Silicon Valley has fallen back to the level of 1996, when the dot-com boom was new.

The scale of the disaster foretells a longer road to recovery. "We thought we had 100,000 jobs to make up," Carlson said. "In an expansion, you can do that naturally in four or five years. Now you're talking about 10. It takes your breath away."

More than ever, the area between San Jose, Calif., and San Francisco needs affordable housing and better schools, said Carl Guardino, head of the Silicon Valley Manufacturing Group. Because the cost of living is still so high, those out of work can't keep looking here for months on end.

"There is only so long that whatever you have saved can last in such a high-cost region," Guardino said.

If they do, bringing the Valley's economy back could be that much harder. "Losing skilled people is never a plus," Levy said. "That is the threat here, the dissipation of talent that could be a long-term blow to the region."

Of those staying, a growing number are re-examining career plans made during the boom.

"People are doing assessments as to what's important to them," said Mike Curran, director of the North Valley Job Training Consortium in Sunnyvale, Calif. "As people get older, there's a tendency to say: `This is probably the last part of my career. I'm going to do something I value.'"

Some are trying to switch careers for more practical reasons, with mixed success.

David Tichane, an unemployed technology patent lawyer formerly with big server-maker Tandem Computers Inc., considered getting retrained to work as a project manager. But in his networking groups, "I found all these project managers who were out of work," Tichane said. "Some other fields are worse."

Tichane, 49, is in probably still the largest group of Valley unemployed, those still grimly hunting. He has been on the prowl for six months. Where he used to find two or three job postings a week for patent attorneys, he said he now turns up only one or two a month.

"Boy, does it get depressing," he said. "The hardest thing is just to keep on going."

Joseph Menn is a reporter for the Los Angeles Times, a Tribune Publishing newspaper.

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