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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signmeup 12/4/2012 | 7:35:53 PM
re: Down and Out in Texas And thats why you have so many startups failing in the bay area? What evidence do you have that "Silicon valley startups work smarter and harder"? Well as someone who HAS ACTUALLY worked in the Telecom corridor and more recently the bay, I assure you there is ABSOLUTELY no truth to your crap. What I have found is that NO MATTER WHERE you work, you run across all types of people with widely-varying work ethics. Some of the most dedicated people I have ever had the privledge to work with are in Richardson, TX. Likewise, I currently work with the same like-minded individuals in the bay area. The common thread is that each of these individuals typically put in over 12-14 hours a day, 6-7 days a week, regardless of which timezone they lived in.

Such silly and obviously uninformed statements you claim just prove that you, sir, are not one of those hard-working, like-minded SUCCESSFUL individuals like the rest of us.

BTW: The last time I had a siesta was in kindergarden; as I recall, the experience was overrated.

Oh, please feel free to respond with more of your drivel; I look forward to pointing the flaws in your logic.
nevermind 12/4/2012 | 7:35:53 PM
re: Down and Out in Texas HA! You guys cant even keep the power turned on. Not to mention your housing market is a bigger bubble than dot coms were. I'll stick with Texas. Once the idiot French are done cannibalizing Alcatel we will be just fine.
DCITDave 12/4/2012 | 7:35:51 PM
re: Down and Out in Texas re: "Why did you just focus on Texas?"

My answer: relevance.

I live in Texas. I would have felt silly driving by shuttered companies and half-empty office parking lots on my way to report on Silicon Valley's troubles.

I covered Silicon Valley for many years when I worked for other publications. Its economy is suffering from a much wider tech slump than this region's more telecom-centric troubles.

Thanks for reading.

NMSgoddess 12/4/2012 | 7:35:51 PM
re: Down and Out in Texas RE: Texas culture

I've worked at 4 companies in the Dallas/Richardson area. I have yet to meet a real native Texan working here, except the ladies who were admins.

Most of the hi tech workers are "yankees", Canadians, first generation Americans, and immigrants. All very smart and all very hard working.

Siesta? Not here.

Every job I had and every place I worked was in bust your butt mode. The irony about the big companies is they don't do any real effort to cull the "slackers" from the "workers", despite the BS the HR department spouts. So the slackers get to stay and the hard workers are let go, only to continue to drive the company into the ground, which leads to more cuts.

I have to agree, both the valley and the prairie are dead for the time being. The irony is I keep reading in the paper about the so called tech worker shortage. Would some one tell us where this shortage is?

But if I must be unemployed and burning my savings, at least the burn rate is less in Texas (and the midwest in general) than in Boston/Washington/SanJose/Bay Area.

It is something to think about when presented with an unpaid relo in these uncertain economic times.

Peter Heywood 12/4/2012 | 7:35:50 PM
re: Down and Out in Texas re: "Why did you just focus on Texas?"

We wanted to do a story that illustrated the human misery behind the layoffs that we're frequently reporting. The best way of doing that was to zoom in on one area, and the Texas Telecom Corridor is a good one to choose because it has been hit hard and because it's right on Phil's doorstep, as he points out.

I've been trying to think of a way that Light Reading could help folk that have been laid off. Any ideas?
switchrus 12/4/2012 | 7:35:49 PM
re: Down and Out in Texas Peter said:

GǣI've been trying to think of a way that Light Reading could help folk that have been laid off. Any ideas?Gǥ

Try this one.

How about Light Reading sponsoring a job fair at some of the up coming trade shows like OFC 2002?

Light Reading can GǣconvinceGǥ some of itGs advertisers to sponsor the event and participate. LR can publicize the events with articles about whoGs going to be there and encourage readers looking for work to show up for the show and the job fair. Helps people looking for work, helps exhibitors by increasing show turn out and should not be a major expense, heck might even be aided by the OFC organizing committee as a way to help their own.
NMSgoddess 12/4/2012 | 7:35:49 PM
re: Down and Out in Texas For one,

If you give publicity to an organization like GeekMeet, that's OK. But when the unemployed go to the site listed by LR (and that sites' related listings) we have to pay for a membership to get access to the goodies. Perhaps they can offer a special deal to the unemployed who read LR? These memberships could add up to over 500 bucks, and may not meet the job seekers needs. But there is no way of knowing unless you pay for the membership.

Another idea is to feature one or two unemployed people in your daily articles. Executives, HW, testing, embedded SW, EMS-NMS ;>. Perhaps the attention may get someone a job. How about featuring some of the technical people who do the hiring (not HR!) and what they are looking for and their experiences in a buyers market. Add some controversy and interview HR and ask them to address the concerns of "mktg hack", and why they post non-existant jobs and generate false hopes.

Perhaps, more positively, you can report on who is really hiring and what areas they are looking for. This would benefit both job seeker and company and provide more depth than an HR job posting.

Expand Lightwork to include more jobs in the hard hit areas, like Richardson.

Interview and list VCs that will take resumes for startups and companies in deep stealth mode.

NMS Goddess

bluey 12/4/2012 | 7:35:48 PM
re: Down and Out in Texas "The common thread is that each of these individuals typically put in over 12-14 hours a day, 6-7 days a week, regardless of which timezone they lived in"

While I'm sure people who put in these hours are great people that I'd prefer to work with considering the alternative, it makes me think of another topic.

The whole optical/datacomms/networking bubble of the late 90s was characterized (at least for me) by years and years of looooong hours, 6 or 7 day work weeks, busting my ass, having no life, not seeing family or friends, feeling testy and guilty on holidays when I'm not at my desk, constant pressure, conquering one deadline only to be pushed into meeting the next one, endless scheduling panic, go go go go now now now now! In the end this effort was supposed to be richly rewarded, making it all worth it.

And what did I end up with? A pink slip, a fat pile of worthless stock options, and a dazed look on my face as I wonder what the hell happened. My bank account isn't that much fatter than my friend's who work outside this industry and have all along told me I'm insane for working like this, while they have led more balanced, happy lives. Was this worth it? I don't know. At times it was exhilarating, but I'm not much richer. I'm tired, worn out, listless, feeling empty. Yeah yeah, working in this business is a risk, nothing is guaranteed, and life isn't fair. Well, as far as that last point is concerned, yes, it sure as hell isn't fair. That's been hammered home quite ferociously.

Now that the boom times have passed, I'm hoping that maybe we can revert to a more sustainable pace, where we can have lives again, where I can get home earlier than 9pm, where I can read books again (remember having time to read books?), where I can take weekends off, get a decent night's sleep, and have a life once more.

I suppose I'm dreaming. Once I get a job again it's probably going to be back to the grindstone once more. But next time I'm going to take the whole line of "Listen man.. we work our ASSES off for the next year or two, get this out the door and we'll BE RICH!" with a big fat pile of salt.
bilbo 12/4/2012 | 7:35:42 PM
re: Down and Out in Texas ..if the famed NMS Goddess is still looking for a position. Has everyone solved their Network Management problems ??
The_Holy_Grail 12/4/2012 | 7:35:41 PM
re: Down and Out in Texas Thanks for responding Phil. I would agree that SV has a much larger problem that spans multiple sectors. Its just your article came across that it was a Texas problem (although there is a high concentration of telecom companies there in the Corridor) when in reality, its a networking sector problem.

From what I have read, TX offers many finacial benefits over other locations so I suspect we may see more tech companies migrate that direction; it remains to be seen if its networking companies or other networking companies

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