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One layoff leads to another

As the recession deepens, it links people: The video game company cuts a writer, who then lays off his nanny. The unemployed nanny stops going to his barber, who can no longer afford dinners served by the waitress at his favorite restaurant.

March 09, 2009|Alana Semuels

When customers sit beneath an intricate gold mural, order kung pao chicken and confide that they've just lost their jobs, waitress Alice Lau understands their hurt and fear. She's feeling the pinch too, as the repercussions of decisions made by others trickle down to her.

Her hours at the Great Wall Chinese restaurant have been cut because regulars such as Rogelio Valdez can no longer afford dinners out. Some customers come in for one last meal to tell her they've been laid off, then disappear.

Valdez, a barber, said business at his shop was down. He no longer sees customers such as Dave Vasquez, who shaved his head to avoid spending money on haircuts.

Vasquez had worked as a nanny for Bill Maxwell. But when Maxwell lost his job with a Pasadena video game company, he was forced to let Vasquez go. The start-up had no money to pay its workers after a major publisher, spooked by signs that the country's economic troubles were worsening, canceled a contract in August.

As the recession deepens across the country, touching millions of individuals, it links people through countless cutbacks and layoffs. One job loss leads to another, much the way a wobbly domino can topple the whole row.

Minor financial decisions -- a penny pinched here, a dollar saved there -- build, rippling through a chain of strangers.


The loft in Pasadena's antiques district was funky, with Victorian chandeliers, exposed brick and a bathroom plastered with turquoise tiles. It seemed the perfect space for the video game start-up, WhiteMoon Dreams.

Founders Scott Campbell, 36, and Jay Koottarappallil, 32, moved out of their home offices and into the rented loft in August 2007. Soon after, a major video game publisher agreed to buy the shoot-'em-up game they were developing. The pair hired a dozen people and a handful of contractors. Everything seemed to be coming together.

Then the stock market started its free fall. Publishers grew skittish about spending money. The founders could see calamity coming, like someone anticipating the breakup of a relationship but powerless to do anything about it.

Last summer, a year after agreeing to the sale, they were crushed when the publisher, which they would not name for legal reasons, said it could no longer buy the game and brought in lawyers to unwind the deal.

But the founders didn't want to give up. They told employees they could stay -- if they didn't mind working for free. Six remained and have picked up a little work, but nothing yet that could revive the company's fortunes.

The stress is accumulating as WhiteMoon Dreams prepares to show off the game -- appropriately named Salvation -- at the Game Developers Conference this month. The founders hope to find a buyer for the project or a publisher that will hire the company to write something new.

Campbell and Koottarappallil feel the pressure of coming to work every day and not knowing whether it will be the last, of depending on family and friends and the unemployment office for money to survive, of watching yet another rent deadline or mortgage payment approach, of wondering who among them might decide to call it quits.

"Everything's on hold," Campbell said. "It's a waiting pattern to see how everything shakes out."

They set a Dec. 31 deadline to shut down the company but couldn't pull the trigger. They sit, work and wait. But some of their employees and contractors couldn't do the same.

Bill Maxwell, a writer who created plots and dialogue for the game, had a family to support and needed a salary. His initial contract ran out in June with an understanding he'd start another job for WhiteMoon Dreams in November.

But when the publisher backed out of the video game deal, the company couldn't afford to hire him again. Without any work on the horizon, Maxwell had to make some changes of his own.

Maxwell and his wife, Nikki, can rattle off a long list of things they've done without since he stopped working for WhiteMoon Dreams.

Their kids, ages 9, 6 and 3, are familiar with them too: No more sushi, lattes or Whole Foods groceries. No trips to Disneyland, indoor playgrounds or bowling alleys. No new books or DVDs. No fixing the tub in their second bathroom. No healthcare.

Bill, 41, spends hours sitting in the study of the family's one-story home in North Hills, searching Craigslist for jobs as leafy trees gently tap on the windows. A child's drawing taped to the bookshelf says, in shaky writing, "I am thankful for my dad."

Nikki, 39, was laid off from a job writing grants at a charter school last fall. When money grew tight, she surrendered to friends' counsel and picked up staples at a food bank in the Valley, although she was more used to donating and volunteering there. She choked up when, in addition to rice, beans and canned vegetables, she was given a sheet cake to share with her children.

Grief and anger have swamped the Maxwells at times, causing them to wonder whether things will ever change. How long can you look for a job without losing hope?

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