After a layoff, a family learns to cope
Editor's note: This is part of a series of stories about the recession's effect on the tech industry.
The Erickson family
(Credit: Andy Erickson)With the calendar winding down, the hours get hardest when Andy Erickson and his wife, Andrea, are forced to take out their checkbook and do the math.
"We see the finish line in December before we have to dive into personal savings," says the unemployed 39-year-old father of three. "It can turn into a tense talk between us for a couple of hours."
For the last 15 years, Erickson had steady work as an IT consultant, most recently at Lucrum in Cincinnati, Ohio. But like a lot of people, he became yet another statistic when his company laid him off--on Halloween, no less--because of the slumping economy.
With belt-tightening now the order of the day, the IT industry so far has lost more than 140,000 jobs this year, according to Challenger Gray & Christmas. That's more than the total for all of 2007--and does not even include the nearly 20,000 people who have received pink slips since the start of the fourth quarter.
Old IT hands who prefer to see the glass as half full can point out that the information technology business has generally fared better than other sectors of the economy. Unlike 2001 and 2002, when the economy was buffeted by the twin blows caused by the September 11 terrorist attacks and the dot-com bust, this time around high tech is not suffering drastic declines--at least not yet.
Unemployment is up across the board.
(Credit: Challenger Gray & Christmas)In fact, Forrester recently revised its 2008 technology spending growth prediction to 5.4 percent, up from 3.4 percent. The slowdown that Forrester expected would kill tech spending in the first half never came. Of course, this is just a snapshot in time. The effects of a mortgage crisis that turned into a financial crisis which, in turn, transmogrified into a global economic crisis are still playing out.
All of that has turned life upside down for families like the Ericksons.
"Most days we try not think about it," he said, adding that "it can be stressful at times."
That stress extends across the IT world spectrum, ranging from networking to the telecommunications sector to computer manufacturing. Recent layoffs announced by Sun Microsystems, Applied Materials, Adobe Systems, and National Semiconductor only add to the worry about what waits over the horizon.
Call it an exercise in groupthink or simply a survival mode reflex, but hunkering down certainly appears to be the common theme. While the causes of this recession may be different, IT professionals are no strangers to uncertainty and they remember the drill. In practice, this translates into budget cuts and freezes on travel, hiring, and general spending. It also involves delayed implementation of previously planned projects.
"We're still in a state of overreaction. It probably will stay that way for another couple months," said Chad Moore, founder and president of Xonicwave, an IT consultancy in San Diego. He does not expect a thaw until the January-to-March time frame at the earliest. Moore says that his clients are grappling with a big unknown and that everybody's gotten too scared to make a move.
"Probably a good 25 percent (of our clients) are still not accepting of things," he said. "Another 50 percent are simply shell-shocked, asking what the hell to do and how to deal with it. The other 25 percent is slowly migrating to the fact that not only do we have to weather the storm, but we have to come out of it with both guns blazing."
There's the rub. Until there's a change in the prevailing psychology, IT unemployment rates will climb. As Moore describes it, the reaction to the recent financial meltdown still interferes with the ability of companies to craft a post-crash IT strategy.
"You have to make payroll, but at the end of the day you have to ask yourselves 'how are you separating yourselves from the competition?'" he said.
It's not an academic question either. Pressured by the recession, crisis management is the order of the day. Companies are being forced to re-evaluate how best to evolve into leaner enterprises that are better fit for survival.
"There's a lot of trepidation about what the future might hold," says Warren Arbogast, an IT consultant who specializes in working with higher education. "In conversations, the word 'terrified' comes up a lot on a personal level."
"People are trying to avoid (cutting) things that are core to their business and that might directly affect customers or sales," he said. "They're also trying not to touch security. Other than that, it's fair game."
One bright spot amid the prevailing gloom is that organizations are more open to new ideas and new ways of doing things, according to Arbogast, who runs Boulder Management Group, in Boulder, Colo.
"When times are tight, I'm seeing business actually uptick...with people saying that now might be the right time to have someone come in and help them envision a different future," he said.
Contract work: Take what you can get?
Until then, even IT professionals with extensive resumes are pressed to find replacement jobs that are commensurate with their old positions. Take Jim Martin, who was laid off by Woven Systems in September.
The 39-year-old network architect and systems engineer had been working on the design of 10-Gigabit Ethernet switching technology for server consolidation and storage networking. The company's B round of financing started to run low just as the venture capital market dried up. Then Intel and AMD decided not to include 10-Gigabit Ethernet on their next generation of server motherboards. It was a perfect storm and it forced Woven to hand out pink slips.
Jim Martin
(Credit: Jim Martin)Martin's family wants him to return to the East Coast, but he prefers to remain in the San Francisco Bay Area, where he has lived for the last 15 years. He's giving it a shot, but even a long and accomplished resume is no longer a guarantee of finding a job--not at this point in the business cycle.
"I've had a lot of people interested," he said. "But what I've found is that they're taking me to their companies and it's, 'Hey, this is a great person. He should come join us.' But then their job openings freeze while everybody sort of panics at this stage of the game."
On the flip side, many companies have budgeted projects that need to get completed. And if full-timers are losing their jobs, that opens the door for part-timers like Martin, who has made do by signing on for contract work.
"It's not very stimulating work, but money is money when times are tough," he says. "What worries me is that, while I'm lucky enough to have a pretty strong background, the people who are younger and not quite as experienced won't have the same opportunity."
Needless to say, the economic crisis is testing businesses and individuals like no time since the 1930s. Fear feeds on fear because nobody has any idea when the miasma will lift. The pressure cooker atmosphere was punctuated by a Silicon Valley tragedy last month, when an engineer fired by the semiconductor firm Siport returned to the company's Santa Clara, Calif., offices with a weapon and shot three colleagues to death.
That was the exception. If the can-do history of the IT industry teaches one lesson to people currently getting the short end of the stick, it's that the bad times never last forever.
"It's cyclical," says Andy Erickson. "It's just a matter of waiting it out. I just don't have whole lot of faith in our government, but maybe we'll come out of this stronger as a country."
In the meantime, Erickson says, he and his family continue to hope for the best as they prepare for the worst.
"The kids know we just can't go out and buy gum or whatever," he says, "They'll just have to suck it up and be part of the team."
Next in the series: A longtime technology trade reporter takes an unplanned detour into freelance writing.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.
...but I've got a request, if I may.
How about some positive news once in awhile? For instance, my employer is still growing like crazy and our sales outlook is very nice. Though we are hiring intelligently, we're still hiring - for instance, there's two help desk positions that are going through the interview stage right now. There are a lot of smaller companies as well that are doing the same thing.
Just because there's panic in some large companies, does not mean there's panic in all of them. Also, there is still no shortage of positions available if you're willing to trade comfort for contract, and are willing to move out of Silly Valley. For instance, my former employer Intel still has quite an impressive number of contract positions open up here in Oregon - programmers, IT, and suchlike. Proof? There were a couple of headhunter queries in my inbox that I had to politely refuse just this morning. Yes, it's anecdotal, but a quick trip through Monster or Dice can confirm what I'm saying.
Seriously - the Apocalypse is not upon us, Charles... how about some articles that reflect the life that is still in this industry, instead of the heavy doom-and-gloom?
/P
* A degree in Business doesn't go too far in the IT field. Now a degree in CompSci or Engineering OTOH would get a lot more attention. If you have IT experience and want to stay in IT, emphasize the experience instead of the degree.
* Simply shotgunning your resume to every opening you see on Monster won't get you far. You would do better to write up some resumes that are custom-tailored to different industries (e.g. one that emphasizes software skills, one that promotes hard IT skills, a generic one that emphasizes business skills (for managerial type positions), etc.
* Check in with local IT headhunters.
* Be willing to hit up contract positions and not just full-time (as a for instance). When I did contract, I had the luxury of choosing to apply for only permanent positions. When a contract began to wind down, I got not-so-choosy about what I would consider.
* If you're really hurting, don't refuse to check on positions offering less money. You can always negotiate for more after the acceptance (assuming it gets to that point), and anything beats unemployment.
* Do something that's actually productive and constructive while you're sitting around the house - there are sites (e.g. guru.com) where there are plenty of folks who are looking to get small projects done and are willing to pay for it. It keeps your skills sharp and at the same time you can make a bit of cash off-the-books.
myles taylor is right - there are jobs out there... you just have to know where and how to look.
I was out of a job about two weeks ago. Now I'm employed again. I agree that I was lucky, but there are always jobs.
I don't quite understand. You are a student, have a degree in business, and are a single mom? If you have a degree, why are you a student?
Anyway, good luck and I hope you find something soon.
The second part I can get on board with, though.
My heart goes out to you guys even as I sit worrrying I may be next, especially since I am the oldest guy in the department. I agree with the comment about freezing H1-Bs. If nothing else, spend some of the $7 Trillion bailout retraining layed off people and subsidizing internships for them so they can do some work with their new skills.
Dan S.
In this economy you have to have an edge, that no one has. If the IT sector is dull (too many IT and Sys Admins to count) then learn another trade, take a pay cut and work from the ground floor. I knew years ago that with all the advances is computing you can rapidly and more effectively cut IT staff. Also you need to see why they are considering the H1B's over the non-H1b's if you can prove your worth your stock in paper willing to give yourself to the company because lets face it each employee is a stockholder in the company and shares the companies succcess and failures. And that also meaning to willing to take a paycut. I would gladly take a paycut where i work to save my job.
The last thing people should realize is that you should network with as many people as you can you never know when it may lead to your next job. It really is who you know and you never know when you may meet someone from a new prospective company that may want to employ you.
Also you may want to jazz up your resume a bit, something tells me that you have experience on it that does not qualify you in the eyes of HR managers. It may be necessary for you to share your resume with other people to help you out. Spelling mistakes, incorrect grammar or non-applicable experience on your resume could easily see your way to the bottom of the drawer. 1 out of 100 kind of tells me that because even in such times you should of gotten more then 1 out of 100 hits maybe 5-6 more.
I do wish you luck and hope you find your next job, I also wish you and your kids a merriest of christmas's.
- Mike
pls check it out. www.narus.com
-john
Also, I'm an optimist, which didn't come through very well in this story. You can find my professional profile on LinkedIn and hopefully you'll see some of the good: http://www.linkedin.com/in/andyerickson
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by ritakish88
February 15, 2009 1:40 PM PST
- dbeikman that comment is for u sry to just put it out there
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