Shakeout Shakes Up Jobs Scene

ANAHEIM, Calif. –- OFC2001 -- A shakeout is definitely underway in the optical networking market. Some startups, such as terabit router player IronBridge Networks Inc., have closed shop entirely. Some have been forced to lay off workers, as in the case of Zaffire Inc. and Mayan Networks Inc. (see Ironbridge's Last Ditch Efforts Fail, Zaffire Fires 20% of Sales Team, and Mayan Ruins?).

Even larger companies like Cisco Systems Inc. (Nasdaq: CSCO) and JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU) have announced big cuts in the last few weeks (see Cisco Slashes Jobs, Costs and JDS Uniphase Announces Layoffs).

How has this affected optical networking companies still standing and hoping to grow?

That’s the question Light Reading asked of company recruiters at this year’s Optical Fiber Conference job fair in Anaheim, Calif.

Companies looking to fill positions appear to be benefitting from the shakeout. But even with the pool of applicants growing, finding top talent is not easy.

What are the toughest positions to fill? Optical engineers specializing in packaging and design, and software experts. Engineers who focus on more general applications and handle process manufacturing tend to be easier positions to fill. One reason is that these jobs can often be filled by people from the semiconductor industry, which has itself experienced a bit of a shakeout. (Of course, some recruiters note, many, if not most, of those losing their jobs are not technical people at all.)

The falling Nasdaq has done plenty to help smaller companies recruit talent from bigger players like Cisco, Nortel Networks Corp. (NYSE/Toronto: NT), and Lucent Technologies Inc. (NYSE: LU). Mark Downing, a technical recruiter with OptiMight Communications Inc. located in Silicon Valley, says that Cisco used to be one of the tougher places to tear people away from, but now things have gotten much easier.

"People who haven’t been there too long see their options sitting underwater," he says. "And they’re a lot more likely to leave now than they were before. It’s not such a hard sell anymore to get them to leave.”

On the other hand, the argument could be made that employees are focusing more on job and financial security, a trend that hurts very early-stage startups. So says Lynne Simler, a technical recruiter at Tellium Inc., an optical switch company that filed for its IPO back in September.

“I think things have changed over the past year,” she says. “It’s a real recruiting asset to tell people that we are a later-stage startup. People still want to take some risks with a pre-IPO company, but they aren’t willing to take as much of a risk as they were a year ago.”

Another effect of the shakeout is that job seekers are more modest about what level of compensation they expect, say the recruiters.

"Eight months ago, junior-level engineers were asking for a 50 percent increase in salary,” says OptiMight's Downing. “That’s just crazy. But now people are being a lot more realistic about what they can ask for."

Although some startups, like Onix Microsytems Inc., say that they have seen an increase in salary offers by as much as $10,000 over the past six months, most recruiters say that salaries are leveling off. On average, companies say that engineering salaries range from $70,000 a year for those just out of school to about $130,000 for individuals with 10 years or more of experience.

As one human resources director of a public optical networking company put it: “We’re finally back in control of the situation, and we’re able to call the shots more now than we did before.”

As for the future, most companies at the job fair openly stated that they were optimistic about their recruitment expansion plans, but at least one cautioned that 2001 would be a slow year all around.

"Things are definitely slowing down, and it doesn’t make sense to continue to hire new people at the same rate we were hiring last year," says the unnamed director of human resources, who didn’t want his name or his company’s name used. “I think it is a smart move, though. We just don’t know what is going to happen, and we have to manage our business the best way we can.”

-- Marguerite Reardon, senior editor, Light Reading http://www.lightreading.com