[Metroactive News&Issues]

[ Silicon Valley | Metroactive Home | Archives ]

[whitespace] Man
I Got Your Pink Slip Right Here: New Yorkers, laid off from dotcom jobs, face the economic downturn with impunity.

Yes! I'm Out of Work

Unlike Silicon Valley, Silicon Alley--New York--is riding easy with the downturn, and the events of 9/11 only made it seem more reasonable

By Lauren Barack

CASEY KAIT FELT little shock when she received her pink slip from Salon.com in March. As the co-author of Digital Hustlers, Kait understood the pitfalls of the dotcom bubble in New York City's Silicon Alley. And when she herself became part of the downturn story, she couldn't have been happier. After four years working first at a startup pace at MP3Lit.com and then at Salon when the online media site bought the company, Kait found she preferred the pace of unemployment. Now her days are spent sewing and making a wedding gift for a friend.

"That was my whole day," says the petite 25-year-old while sipping a glass of wine at a hip Lower East Side restaurant. The neighborhood, once famous for its Jewish delis and discount shopping on Orchard Street, has in the past year seen the openings of clubs, galleries and boutiques that sell clothes like the trendy jean skirt and top Kait is wearing. "It's nice to be able to enjoy each element of my day," she says, munching her salad. "I go to galleries and read books."

Of her fast-paced dotcom past, she says only, "I hope to not have to be in that position again." As the dust slowly begins to settle along the once-vibrant streets of Silicon Alley, as coffee shops close and offices full of computers and ergonomic chairs sit like mausoleums, the Alley's former workforce is not looking back. And especially after events of Sept. 11, they are happy to trade in their 18-hour days for afternoons training for marathons, catching up on dating, and traveling the world, while family members collect and deposit their unemployment checks back home.

"And we're enjoying ourselves at the beach homes of other people," Kait says, then stops herself and laughs. "That sounds awful!"

But not as awful as what's coming out of the mouths of her West Coast counterparts in Silicon Valley. And New Yorkers, for the most part, seem to know this. Almost all have heard the stories of the two-month waiting list for U-Hauls, or of dotcom workers living in homeless shelters. Some have friends who left high-tech for firefighting or law school when not just their jobs but entire companies disappeared.

Vacancy rates in office buildings in San Francisco climbed to 10.3 percent as of June this year, close to the same numbers of 1996, in the pretech boom days of the city, according to a study by commercial real estate research firm Torto Wheaton. Yet unemployment remains higher in New York--5.9 percent for October, as compared to 4.5 percent in San Francisco the same month. Still, most New Yorkers are staying put for the long term Except, of course, for a vacation or two in the interim.

The Big Chill

Ron Klein, 24, received his pink slip in July from FeedRoom, an online multimedia news service, after 18 months as the assistant to the CEO. But he had been ready to leave for months, since layoffs in April that hinted that more were on the way. "And after they have layoffs, it's not fun to work at those places," he says. "I felt dissatisfied."

Instead of sending out résumés, however, Klein is taking off for Antigua to spend three months studying Spanish at a language school. When he returns to his shared three-bedroom walk-up in Brooklyn, he believes there will be a job for him. Maybe not at a dotcom, but Klein says he has had enough of that.

"I'm definitely glad I had the experience, but I want to find something in the nonprofit sphere of the world," he says. "Or with a large media company. Or a Big Six consultancy. I hopefully would like to get a job where I can continue to speak Spanish."

Klein's lack of concern is typical of his out-of-work dotcom counterparts wherever they live, according to John Challenger, CEO of the Chicago-based placement group Challenger, Gray and Christmas. The company specializes in helping [former employees] re-enter the job market. The problem with this batch coming out of failed technology startups, Challenger says, is that they've never had to look before, and they don't know how to do it now. "This is a group of people who came out of school and were wooed by companies, unlike other generations," says the 46-year-old Challenger, who founded the company in the 1960s. "They're waiting to be wooed again. They've never known anything else."

Can I Quit Too?

This "waiting for Godot" attitude, as Challenger describes it, even infects the still employed, who watch with envy as their unemployed buddies plan bike trips and vacations to Asia, and decide they want to play, too. As an example, Kait describes one friend who, having survived recent layoffs at his dotcom, went to his supervisor to quit, but was talked out of it by his boss.

"Malaise had set in," she says. "It's sad when you see your friends leave. A lot of people want to work from home now because the office is no longer a center."

Rachel Kleinman, 26, also misses the social life that came with her job as a senior site strategist at teen community site Bolt.com in New York. The loneliness is harder when she thinks of her friends who still work for the company, including her roommate. In one way, she says, she knows she's lucky because there are jobs for her. Yet she envies her friends on the West Coast, whose entire job market was annihilated.

"I don't think my friends in San Francisco felt it was a personal rejection," the Brandeis-educated Kleinman says of their layoffs. "Logically, I didn't take it that way at all. But in terms of the first couple of weeks? It affected me. It affected me socially."

Casey Kait misses daily lunches out, drinks after work and dinner with friends. This summer, she's gone out to dinner just three nights, she says, including a small birthday party for a friend. "This is our big night out," she says, gesturing towards her co-author Stephen Weiss, who sits next to her. "People don't feel right about going out. It's not a time to celebrate."

What, Me Worry?

It's also not the time to find a job, it seems, for most Alley-ites. Few seem anxious about money. Some have severance checks to buoy them. Others trade in Soho apartments for shares with friends. "People were making pretty good money," says Kait. "And these are anti-corporate people. They want to wait until something excites them."

Her 26-year-old co-author, Weiss, moved out of his $1,100-a-month studio in Noho to crash with Kait uptown while her roommate is away for the summer. He doesn't seem worried about finding his next spot. In fact, he doesn't seem worried at all.

The Yale graduate spends his days working on four projects, including a book-length poem and a proposed ebook with Kait. When his finances dip, he heads over to Vogue for two-week stints at fact-checking. With their book in its first printing, it could be awhile, if ever, before the two see additional profits past their initial advance. "I'll probably look next for a share, and something temporary," he says. "I don't know what I'll be doing in six months."

He doesn't have to know, Challenger says, because he's got resources to depend on. "That's the blasé side," he says. "They're not going to be really depressed until their savings are gone." It's one thing for Josh Harris, the former CEO of Psuedo.com who lost some millions, to recuperate on his apple farm in upstate New York with the rest of his millions.

But part-time fact checking at Vogue wouldn't cover even a down payment on a 400-foot studio apartment in the West Village. And in a city where a pint of Häagen-Dazs can run $4.79, a seat for Apocalypse Now Redux $10 and even a six-pack of Budweiser $9, it's hard to be broke.

A downturn in cash severance packages has also hurt the happy-go-lucky unemployed. Pay-outs are down 20 percent for front-line workers, or nonmanagement, since 1997, according to Manchester Inc., a management consultant firm based in Florida. The national average is 24 weeks of paid severance.

But New Yorkers fresh from the dotcom lines are seeing much less than that. Kleinman received just two weeks' worth of severance and was also laid off the last day of the month, which immediately ended her benefits, including medical insurance. "I thought it was pretty pathetic," she says. The Antigua-bound Klein also received two weeks, but his roommate Reuben Teague got a bit more--four weeks--after being laid off from his management consulting gig at Computer Sciences Corporation. Then again, Teague also wasted no time in looking for--and finding--a job.

The Princeton-educated 25-year-old starts at Ralph Nader's Washington, D.C.-based group, Public Citizen, as a research associate this month. He is happy to be leaving the dotcom fray, but no happier than his parents, who, Teague says, "used to be hippies," and never understood why he went into business in the first place. "I don't know who the panicky people are," Teague says, who organized a backpacking trek with friends for most of the summer. Kleinman, on the other hand, doesn't know how people aren't nervous, and she thinks their laid-back attitude is a sham.

"I'm definitely stressed out about money," she says. "I don't believe all those other people. There has to be some amount of stress." Teague may be feeling calmer because he has a job lined up, while Kleinman is still searching. Luckily, she says, she had been looking before receiving her pink slip and is hoping to hear back from a nonprofit that does work similar to Bolt.com. How she'll make the transition from earning more than $50,000 a year to a nonprofit salary, however, is adding to her concerns.

"I'm pretty invested in keeping my lifestyle," says Kleinman, who admits to paying more than $1,000 a month in rent for a share in Hell's Kitchen. "Like, I don't want to give up cable."

With a shopping bag from the hip discount chain H&M at her feet, it's clear she trying to make some amends. "I'm trying not to shop," she says, while finishing off her grilled chicken wrap at Emerald Forest in Noho, where not one customer or worker appears to be older than 35. "But I still go out every night," she laughs. "And my mom lives in New York. So I can still go home for a free meal."

[ Silicon Valley | Metroactive Home | Archives ]

From the December 13-19, 2001 issue of Metro, Silicon Valley's Weekly Newspaper.

Copyright © 2001 Metro Publishing Inc. Metroactive is affiliated with the Boulevards Network.

For more information about the San Jose/Silicon Valley area, visit sanjose.com.

Foreclosures - Real Estate Investing
San Jose.com Real Estate