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Layoffs Hit Home in Rochester

The once-resilient region struggles after Global Crossing job cuts.


ROCHESTER, N.Y. — Janet Mahoney has never had to apply for a job since getting out of college 20 years ago. With high-tech positions popping up all over town, companies were wooing her.

But as one of the growing number of employees let go by fiber-optic networking company Global Crossing Ltd., which filed for bankruptcy protection in January, the 41-year-old technology executive is finding the job market much different.

Now, she's using an executive recruitment firm to help her polish her resume, give her interviewing tips and devise a strategy to land a job. Her only requirement: She wants to stay in the family-friendly Rochester area.

That won't be easy because Rochester also is struggling. The six-county area of 1.1 million in upstate New York is trying to maintain its status as a pocket of affluence and resiliency while it attempts to redefine itself and lessen its dependence on the region's dominant employer, Eastman Kodak Co. It is an economy in transition as Kodak, which once accounted for 22% of the region's payroll, has dismissed nearly two-thirds of its local work force in the last 20 years--a total of 36,000 jobs.

Kodak is cutting more this year, and Global Crossing's Rochester operation--the company's biggest with more than 1,300 employees a year ago--probably will take another hit after the company's news Friday that it will cut 1,600 more workers in the coming months.

Community leaders long have boasted about Rochester's elastic economy, which has been able to withstand several decades of battering to a hard-hit manufacturing sector stretching from Buffalo to the Adirondack Mountains. An ever-emerging stream of small, new companies consistently has picked up the slack from major layoffs at Kodak and the other giant employers, Xerox Corp. and Bausch & Lomb Inc., and increased the job ranks every year.

But last week, as a wet March snow blew in off Lake Ontario, the region felt another kind of chill: The state Labor Department's monthly survey found that the historically low unemployment rate jumped to 6.3% in January, higher than the nation's 5.5%, and that the area had lost 12,400 jobs in the previous 12 months.

For Rochester's popular, dynamic mayor, William A. Johnson Jr., the news wasn't surprising. Long warning that the elastic in the economy was getting stretched out, Johnson proclaimed that the area had reached the saturation point in its ability to absorb the thousands of jobs eliminated at the Big Three and elsewhere.

"Objectively, we only look good compared to Buffalo," Johnson said in his annual state of the city speech last week. "From a national perspective, greater Rochester's rates of job and population growth have ranked near the bottom of all metro areas for the past 30 years."

Last year, Rochester's employment numbers ranked it 249th out of 288 metropolitan areas.

For Mahoney, a single mother of a 6-year-old boy, the dire employment news means her effort to find a job in Rochester just got tougher.

"I love it here, and I don't want to move," says the former Global Crossing director of call-center technology.

Despite harsh winters, the area is known as a friendly, family-oriented community where neighbors don't have fences separating their properties. With a median household income of $31,000--and high-tech pay far surpassing that--the city and surrounding Monroe County can be quite affordable. The median home price is $94,000. The region usually is the top United Way contributor per capita nationwide and has a long history of giving, fostered by the philanthropy of George Eastman and his photo equipment company.


Global Crossing Woes Hit Hard

Mahoney, among about 300 Global Crossing employees laid off in the last year, had bought into the company's vision of a seamless, worldwide, high-speed voice and data network that the onetime Beverly Hills company was building. That is why Global's bankruptcy has hit Rochester's psyche harder than the thousands of layoffs at Kodak, Xerox and Bausch & Lomb.

This, after all, wasn't an old-line company shedding weight in the face of stiff competition. This was the promise of the future, the leading edge of a wave of telecom firms that were going to put Rochester on the map as a top communications technology center in the nation. This was the heir to Rochester Telephone Co., the longtime utility that was the safest of investments, a stock for widows and orphans.

Rochester Telephone's parent firm, Frontier Corp., was purchased by Global Crossing in 1999.

"This was not Kodak slugging it out with Fuji," said Rocco DiGiovanni, Monroe County's director of planning and development. "People felt betrayed."

Although the number of telecom firms in the area has grown 30% in two years, to 92, much of that growth came during a telecom boom that has since gone bust.

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