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Down and Out in Texas

Layoffs and hiring freezes add to the chill in the air here in Telecom Corridor

November 9, 2001

5 Min Read
Down and Out in Texas

RICHARDSON, Texas – After being laid off, workers here in Telecom Corridor say that finding new employment is the toughest job of all. The hours are long, the pay is nonexistent, and the process of competing for a hiring manager's or CEO's attention is humbling, to say the least.

"I've been working from 7 a.m. to 7 p.m. everyday just to try and keep up with possible opportunities here and on both coasts," says one engineer whose employer recently went under. "It's tough."

Unfortunately, the coming months don't look promising. The holidays are approaching and, with telecom companies still guessing whether their business has hit bottom, few are considering new hires until after the first of next year.

"Companies are hunkering down for the winter. They're just hiring a skeleton crew that can help them rebuild when the market comes back," says Jim Orr, who worked as the principal network architect for Latus Lightworks until it shut down several weeks ago.

An informal survey by Light Reading shows that most feel the job market is still between six and nine months away from a recovery. (To take the poll and see the survey results, click here.) Even those that are hiring, however, are taking their time, knowing that there are more than enough qualified candidates on the street.

Since this region is so closely aligned to the telecommunications industry, this year's layoffs at Nortel Networks Corp. (NYSE/Toronto: NT), Ericsson AB (Nasdaq: ERICY), and SBC Communications Inc. (NYSE: SBC) have hit especially hard. Alcatel SA (NYSE: ALA; Paris: CGEP:PA), for instance, employed about 7,000 people here in January, but will only have about 4,850 on its payroll when it completes its most recent cuts. Fujitsu Network Communications Inc. (FNC) also recently cut 200 of its 2,400 jobs.

Startups, too, have been devastated. BrightLink Networks Inc., Codestream Technologies Corp., Ennovate Networks, Latus Lightworks, Metera Networks, Zhone Technologies Inc., and many others have either shut down entirely or significantly cut back their Texas-based operations.

U.S. employers cut 415,000 jobs from their payrolls in October alone. This was the largest nationwide employment decrease since May 1980, and it followed some 213,000 job cuts in September, the U.S. Department of Labor says.

Telecom Corridor, indeed, is feeling the pain. Unemployment in the U.S. was at 5.4 percent in October, up from 4.9 percent in September. In this region, however, unemployment hit 5.4 percent in September, according to the Texas Workforce Commission. Throughout Texas, the unemployment rate has been at 5.1 percent or higher since the end of May.

With so many out of work in one industry, the competition for every unfilled job is fierce. Last year, one telecom marketing manager from out-of-state recalls that with the help of recruiters he snagged three job offers from area companies in a matter of a few weeks. "Even relocation costs weren't a problem back then," he says.

Now, however, recruiters aren't cold-calling talented workers; it's the other way around. But even the headhunters can't do much with hundreds of unsolicited resumés when their clients just aren't hiring.

"We're still working with the area's big venture capitalists, but none of our searches are in the telecom industry right now," says Jeremy King, a senior vice president and partner at Austin McGregor International, the Dallas-based search firm whose clients include Sevin Rosen Funds, Mayfield Fund, and Austin Ventures. "The VCs know where the telecom startup opportunities are and, since the pace of investments is slow, they're doing more resumé vetting themselves."

With recruiters in a holding pattern, job seekers look to career counselors such as Optimance and networking groups such as Career/HiTech Connection to give them some kind of edge. One attendee of both groups says he learned how to pitch himself to a prospective employer in 30 seconds, which is helpful, since "you end up talking to more answering machines than people." An ex-Nortel employee says he's learning how to better match his skills to jobs outside the telecommunications industry.

But even savvy career coaches are no match for a well-worn Rolodex and personal networking. "Sending a resumé in [unsolicited] doesn't do you any good," says Orr. "You have to get someone you know to bring your resumé in. Even in those situations where I do know somebody, I'm seeing seven or eight other people with connections just as good."

Now the folks who were lured from defense and manufacturing jobs into telecom are lining up with resumés in hand outside Fort Worth's Lockheed Martin Corp., which just won a multibillion-dollar defense contract. And those that left optical networking startups for the security of the big telecom companies are finding the air over there is just as thick with anxiety.

There are jobs out there, insists Gregg Wetterman, founder of GeekMeet, a North Texas technology networking group with some 8,500 local members. Wetterman says he's heard from several large telecom companies that are quietly looking to fill very specific jobs.

"It was hard for these companies to decide which people to let go and, many times, they culled too many too fast," he says. "In those cases, they can't actively recruit; the response would be too overwhelming."

At local watering holes, such as Nedley's in Richardson and The Flying Saucer in Addison, the midday crowd wearing pressed khakis and collared shirts well outnumbers the college students and other patrons. They share new leads, critique each other's resumés, and try to keep their spirits up.

In the nearby suburban neighborhoods, where two-income families have one car in the driveway during working hours, laid-off workers ask themselves how long they can stretch their severance pay, whether they should get a part-time job to keep money coming in, and what their families can do without until things start looking up.

"Probably the hardest thing to do is to stay upbeat day after day," says one market analyst who was fired by an optical networking equipment startup several weeks ago. "There's a lot of cynicism out there, but you can't let it get to you."

— Phil Harvey, Senior Editor, Light Reading

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