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New Thinking Vital to Survival

Contractors, Others Feel Effect of Dot-Com Meltdown


Many of the once-highflying dot-com workers who've lost their jobs are discovering that they need new strategies--from low-paying temporary work to retraining--to cope with longer periods of unemployment than they ever imagined.

"There were some very talented people working for these" high-tech companies, said Fred Hobbs, marketing director for of Boulder, Colo., "and now they are having to apply to more staid companies who can afford to be more selective. The contractors were the high-paid hotshots who came and went, but I suspect more companies are looking to hire people who will be around for a while.

"There was a sense once that anything on the Web, any technology, was going to make money, but there were no solid business plans," he said.

That dot-com meltdown has left tech worker Joe Covert, 54, "stuck" in Jefferson City, Mo. Covert was the archetype of the nomadic computer programming expert, having chased bigger and bigger paychecks across 15 states in the last 10 years. He says he earned as much as $150,000 a year, enough to allow a good life for his seven-member family and allow his wife her wish of staying at home to raise their children. Covert took a three-month contract last year that was not renewed.

"I've moved my family all around. I've killed them just about," said Covert, who has had to borrow heavily from relatives to stay afloat. The last job "didn't turn out to be a good move. I'm also not a saver, and that has been a big mistake. At one time, I had about $10,000 in an IRA. I had to spend that for living expenses. I just misjudged it. I have to take the credit for that. I saw the end coming, but not how quickly, not how deep and how long."

So Covert may have to resort to the moving van once again, but for a much longer trip. "Saudi Arabia wouldn't be bad. England wouldn't be bad," said Covert, willing to bank on one last big move just to get his family back on their financial feet.

Denice Singleton, a laid-off Web copy editor and producer, is staying put to wait for the right job and the right company to come along. The 38-year-old mother from Westchester, N.Y., has faced serious setbacks before and is fueled by the knowledge that she has always persevered and has always been able to bounce back.

It's an optimism one can feel from her daughter and from Singleton's mother, although Singleton's own confidence has a different edge, honed by determination and a bit of anger.

Singleton worked for three struggling start-up companies before she was laid off by Physicians Online in November.

"I had no savings," she said. "I just didn't think I would be laid off."

Now, she's doing temporary work and earning about half of her former $48,000 annual salary. Singleton, who's looking for a job in technical writing and Web design, said this time, she's got some requirements for her future employer.

"They will have to have been in business for a while, showing a profit and doing well on the stock market," Singleton said.

She recently turned down a job with a start-up that billed itself as a Dr. Koop-style online medical information business, referring to former U.S. Surgeon General C. Everett Koop. "But they weren't Dr. Koop, and he didn't last too long at that Web business either."

Not everyone is as confident as Singleton.

Eric Earl, a former systems engineer from Atlanta who was laid off by a microwave technology company on Valentine's Day, said that at age 57, he's frightened, even though he had a year of expenses saved up.

"My wife is an engineer" and still working, Earl said, "but at my age, I'm concerned. I've sent out 70 resumes, and I've only gotten two responses."

Pay Scale Readjustment

The lack of jobs often means lower paying contract work for laid-off dot-commers.

Bob Adkins, 46, a senior network engineer, had worked for a company that hadn't been able to pay him for months and was shut down in March when the venture capitalists who could have bailed them out got fed up with his boss and pulled out "the day we were supposed to get paid."

The Fairfax County, Va., resident says he has found some contract work but has had to cut his rates by 25%.

His six-month emergency fund has been tapped. Now, Adkins is trying to avoid dipping into his 401(k).

Fortunately, his wife, Connie, is still employed as a database administrator.

"So, we're not in absolute dire straits," Adkins said, who finds himself competing with overqualified job seekers who also have been laid off.

Adkins, who has an 18-month-old son, said he longs for a federal contract job in which he could "just hide out for a year or two. . . . I would love to get out of the dot-com world altogether."

Yet, for some, being a contractor is troublesome.

"Contractors are limited by what they will be allowed to do within a company, and we're always the first to be let go," said Arthur Gallun Jr., 30, of Los Gatos, Calif. "I wouldn't mind working for another start-up, but it would have to be a permanent position."

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