Techies Layoff Trauma
By Dana Greenlee, Co-Host WebTalkGuys Radio

The story of Stephen shows how a layoff is not always an ambush by Human Resources wielding a pink slip.

Stephen, as well as the 40+ staff at a dot-com company, thought the CEO was just on vacation. As weeks turned to months, the CEO called in to his companies Help Desk and asked Stephen to lay off many of the staff. Weeks later, paychecks and lease checks bounced. The electricity was disconnected. As more staff drifted away, the CEO also remained “on vacation” and unreachable. Stephen stayed until he was the only person left, and then began searching for another job with a paycheck. He never heard from the CEO again.

Yes, working for a secure dot-com company is starting to sound like an oxymoron. The first quarter of 2001 saw nearly 26,000 Internet job cuts, from the tiniest startups to giants like Seattle’s Real Networks and Amazon.com.

But it may only seem that Internet businesses are responsible for the brunt of the staff slashing. In actuality, dot-com layoffs declined in March. Maybe that's because dot-coms are running out of jobs to cut. Meanwhile, non-dot-coms such as MCI WorldCom laid off 10,000, Delphi Automotive laid off 11,500, and Nortel laid off 15,000.

The unemployment rate rose from 4.0% eight months ago to its current level of 4.5%, according to the Bureau of Labor Statistics.

Nick Doty, Editor at Techies.com, wrote of the trauma of the dot-com unemployment surprise attack in his recent articles “The Dishonorable Layoff” and “Layoff Stories from Beyond” . Nick gave us 10 minutes for 10 questions about the disappearing CEO, bouncing paychecks, and the questionable methods used by dot-com's when laying off their tech workers.

Q: We’ve been hearing stories of trusted employees given last minute notice on layoffs and having security escorts out the building. What’s going on?

A: Employers argue that this is the only way they can handle layoffs. They’re legally able to do that for security purposes. Companies sometimes have to make last minute decisions without a lot of folks knowing. Even so, techies are looking for a little more respect. Employer vs. employee – you could argue who’s right all day. It’s come full circle. Employers were getting a lot of grief a couple of years ago when it was hard to find staff and they’d up and leave after six months, a lot of job-hopping.

Q: Why are companies resorting to these tactics now?

A: This is a tradition in the established tech community. Once companies make technology advancements, reach a certain level or the market is just not there, it’s very typical that companies have to make very quick, sometimes major, layoffs. It’s sometimes cold. Techies are saying, “Look, times are tough, give us two weeks notice, some sort of incentive to come back to your company when times are better or at least appreciate me for my contribution to date”. A recent Techies.com survey found that almost 95% were upset by the way they were laid off.

Q: Any shocking first person accounts?

A: Techies.com had a contest for the best – or I should say the worst – layoff stories. The winner was the case of the disappearing CEO. After awhile, he stopped coming to work and no one knew how to get hold of him. He just gradually ordered layoffs from different places around the country. Finally, when they were down to just the CEO and this one employee, he stopped coming to work, too. Still to this day no one knows what happened.

Q: Severance packages soften the blow. Are people getting these or getting cut off?

A: About 27% of the people techies.com surveyed didn’t receive any severance whatsoever. Usually everyone receives some sort of benefits, though. Usually the rule of thumb is 1-2 month’s severance pay. For the people that have been there a number of years, they will get an added week per year of service. Managers might get six months and senior managers might get up to a year severance. Cisco gave 6,000 employees, from PC operators up to software engineers, at least six months severance pay.

Q: About 75% of displaced workers are not finding new jobs for six months. What’s the next step for these workers?

A: We’ve heard stories of tech workers going to Europe, either moving there or trying to get a work visa. These are usually your younger folk. Some are going back to school for a graduate degree. There has been a great boost at techies.com with our website training with the hopes that they will better qualify for jobs they’re seeking. Companies can afford to be picky these days with all the displaced workers, so you’re seeing more difficult requirements for hiring these techies. You’re just not seeing entry-level positions anymore.

Q: What’s your advice?
A: It’s hard to stay current if you’re laid off for a year and you’re not working or training. My advice to techies has been once you get two months being unemployed, you better start training or finding different ways to market yourself. It’ll probably be another six months to a year before you see another dramatic difference with job openings. Even if you’ve weathered all these layoffs and are still employed, keep updating your skills.

Q: Are you seeing the older generation techies being concerned about retraining?

A: We have found in past surveys that there is a lot of age bias in the tech sector – which is pretty sad. It’s also understandable because a lot of these older workers might have started training when they were 35 or 40, and they might just not have the ambition or the drive to keep learning new technologies.

Q: Are laid off tech workers trying self-employment and contract work?

A: People that have never tried self-employment may have an unrealistically rosy picture of being your own boss and working from home. But there’s not a better field out there than technology to try self-employment. Folks in development programming are fairing better as they don’t have a lot of start-up costs.

To have the most success being self-employed, you mustn’t be bothered working in your leisure time. We find that those who have already tried it will say you don’t get as much money as you’d think you would and it’s a lot more work than you think. I would say to the techie it’s not the best time to try to freelance any of your work. But if you have a regular job and you’re doing web pages on the weekend, then maybe you can develop that into your own business.

Q: What types of tech positions were laid off?
A: The most common positions suffering layoffs were middle managers, IT managers, PC operators, or what are called help desk technicians, entry-level techies. Programmers were big in the layoffs.

Q: Any positions that are more secure than others?
A: One of the amazing things is the position that keeps growing in demand – quality assurance, people who test software. Also, security technicians are in great demand, what with all the viruses exploding onto the scene every day.

Nick Doty writes for the e-cruiting website focused on the career advancement of technology professionals at www.techies.com. A full audio interview with Nick Doty can be heard at www.webtalkguys.com.

(Editor's note: Dana Greenlee, president of LoudVox.com and co-host of the WebTalkGuys Radio Show, writes about technology every Friday in the Index. WebTalkGuys, which features technology news and interviews, can be heard Saturdays from 11 a.m. to noon on KLAY 1180 AM in the Tacoma/Seattle area. Past show and interviews are also webcast via the Internet at http://www.webtalkguys.com).