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Once-Highflying Dot-Com Crowd Comes Back Down to Earth Rapidly

Technology: For the newly unemployed in Silicon Valley, the job market is tight but the rent check is still due.


SAN FRANCISCO — Web site producer David Pruitt's ride on the technology boom's hot-air balloon is losing altitude quickly.

Laid off in early February from his $80,000 job at America Online in Mountain View, Pruitt figures he can afford just three more weeks of looking for work in Silicon Valley.

"I didn't think it would turn out this bad," said Pruitt, 26. "I'm going to have to move back to Oklahoma."

Throughout Northern California, tech executives and support staffers who were brimming with confidence a few months ago, even volunteering for buyout packages or taking time off from the job market, are now frantic to land almost anything.

Each person's job-search story is different, and some have ended well. But at all levels of the swollen work force in Silicon Valley and San Francisco, dot-com, software and computer hardware layoff victims say they are stunned at how quickly their world turned upside down.

Companies "are slamming on these hiring freezes," said laid-off Web engineering analyst Carolyn Warren of Santa Clara. "Out of 10 of my friends who got laid off, three have jobs."

In Santa Clara County, the heart of Silicon Valley, unemployment jumped from 1.8% in February to 2.2% in March. That matched the largest monthly rise since 1995, and no one predicts it will get any better for months.

San Francisco's March unemployment rate also edged up to 2.5% from 2.4% a month earlier and probably will accelerate as more dot-com workers exhaust their severance deals.

"We've just begun to see the technology community starting to come in," said Stephen Williams of a state unemployment office in San Francisco. "By May or June, we'll start seeing them in larger numbers."

The vast number of tech layoffs is making job-hunting harder than it's been in many years, said Bruce Smith, principal economist at the California Department of Finance.

In Menlo Park, home to billion-dollar venture capital firms, new faces are appearing at a state unemployment and training office. "We're getting a few PhDs and MBAs coming through the door," said Arlene Borg, a local official of the state Employment Development Department. "There are some marketing folks who were making $120,000," some of whom are stunned when they learn the maximum unemployment compensation is $230 a week.

Interviews with labor experts, recruiters and the growing ranks of the unemployed show some patterns are emerging in this harsh transition from the tech boom.

One is that workers with the most specialized expertise are faring the best. Companies are still hiring senior engineers and accountants, while marketers, administrators and others with "soft" skills are more apt to be deemed expendable.

Job hunting "definitely gets easier the more technical your skills are," said Michael Blend, a 33-year-old lawyer and corporate deal maker. Blend left late last year as the struggling online retailer shuttered its San Francisco office.

Blend is one of the lucky ones: He found a lower-paying job at a more technology-oriented start-up, a voice-recognition firm called

Another trend is the desire by many scarred dot-com veterans to return to more-traditional employers.

"Fortune 500 companies are benefiting from this," said Will Dobbins, a Los Angeles recruiter at FutureStep Inc. "A lot of people who left those companies thought dot-coms or start-ups would be a paradise. They didn't realize how good they had it."

But many big local companies are laying off employees, not hiring them.

Ed Lewis, 42, spent 16 years at Pacific Bell, the last three of them building a Web services operation that had 140 people reporting to him. Then he quit, took a raise and rolled the dice at Pleasanton, Calif., start-up RedKnife Inc., which provides online commercial services for businesses.

He worked for RedKnife for six months of "insane hours" as director of engineering before he was laid off a few weeks ago.

Lewis called PacBell, only to learn that there was a hiring freeze. Married and the father of six, he would prefer an employer with more than a few months of history behind it. "It would be nice to go back to a company without such huge expectations of the time they want you to put in," he said.

As reality sinks in, those who have been job searching for weeks often scale back their expectations.

"Before, you could get a $10,000 or $15,000 increase every time you changed jobs," said laid-off San Francisco Web developer and programmer Spencer Thiel, 25. Recruiters used to track him down constantly at his $68,000-a-year job at a design firm, where he worked for clients ranging from Macromedia Inc. to

Out of work for six weeks, Thiel said that whatever job he finds probably will be less exciting than what he had. "I'm going to have to enter on [the same level] I was on--maybe a little lower," he said.

Thiel still believes he will be able to find a job that will enable him to keep his $1,000-a-month apartment.

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