A Silicon Valley company thought so much of Jim Roorbach that it brought him here from Virginia in January to direct its information services. He and his wife bought a house in San Jose.
Then one day in May, Roorbach was laid off.
Until recently, that wouldn't have been terrible for Roorbach, 59. A retired Navy captain with two master's degrees and 36 years of technology experience -- he should be an employer's dream.
Not so in the brutal summer of 2001 in Silicon Valley, where the high-tech downturn and economic slump have hit hard and fast.
Since the NASDAQ index hit its all-time high on March 10, 2000, the stock wealth of the 100 biggest technology companies in northern California has dropped by a stunning US$2 trillion, according to an Associated Press analysis.
As companies lost value, the local unemployment rate more than doubled -- and is now worse than the national average.
Layoffs hit safe havens such as Hewlett-Packard Co, not just flamed-out Internet companies.
"So, what do you do for a living?" is no longer a pleasant icebreaker at social occasions.
Companies that aren't shedding workers have stopped hiring. Those with jobs are taking pay cuts. Lucrative mergers and initial public offerings are drying up.
For most people, the tech boom's giddiness seems like a dream.
"The job market is almost nonexistent," said Roorbach, who has had job interviews but no offers. "If this goes on four, six months, you're going to see a mass exodus out of the valley."
Silicon Valley has been through ups and downs before, notably a dip in the mid-1980s blamed on snags in the personal-computer market. But veterans like Jerry Sanders, who founded chip maker Advanced Micro Devices Inc in 1969, say this is the worst.
"The valley has gone from exuberance to spookiness," said Jamis MacNiven, owner of Buck's Woodside, a restaurant famous for the dealmaking done over pancake breakfasts. "I personally haven't been affected, but so many people I know are wrapped up emotionally and financially."
Still, the overall climate in Silicon Valley may not be as bad as it seems. Many companies expect business to turn around next year. And many analysts say the area's economy is merely returning to earth after reaching unsustainably high levels in recent years.
"Sure we're in a slowdown, but it's not as ridiculous as we're being led to believe," said David Conrath, dean of the business school at San Jose State University.
Nationwide, telecommunications, computer and electronics companies have announced more than 358,000 job cuts this year, according to Challenger, Gray and Christmas, a job-placement firm. In Silicon Valley and San Francisco, the number of unemployed people soared from 29,400 in December to 85,600 in July.
Santa Clara County unemployment jumped from a record low of 1.3 percent in December to an estimated 4.7 percent in July -- the highest rate since 1995. In San Francisco, home of most of the dotcoms that have gone bust, the rate vaulted from 2.5 percent to 5.3 percent.
Those figures are worse than the nationwide mark of 4.5 percent -- and don't account for recent layoffs and people still collecting severance pay.
For tech workers used to toiling six 12-hour days a week, the freedom of unemployment can be jarring. Laid-off attorney Andrew Brenner co-founded a "Recession Camp" in June. He takes other jobless souls on weekday hikes, bike rides and outings to ball games.
"There's nothing more you can do at a certain point," Brenner explains. "Make the best of a bad situation."
For 33-year-old Benita Randle, being laid off from her job as a software tester at a consulting firm is a very good thing.
She took a US$30,000 pay cut and now feels much more fulfilled working as a development assistant for the YWCA in San Jose.
"You think about other things, other than `What's the stock doing today?' `What's this new technology?'" Randle said.
"The thought of doing what I was doing before made me want to hurl."
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to