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One layoff leads to another

COLUMN ONE

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.

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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.

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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.

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