patti wilson's blog

Silicon Valley 400,000+ Job Loss in 2000-2002. Will it happen now?

I always like to remind people of the days of the "rolling recession" meaning the last one we had in 2000-2002 where the Bay Area lost jobs in 2 years equaling the total population of San Francisco. In other words, the great tech bust earlier in this decade created more damage to a localized area while other parts of the US were moving into the real estate bubble. The Fed's interest policy of course aided and abetted that situation which now is part of the underlying cause of the world-wide meltdown we are seeing now.

I have been asked if Silicon Valley/Bay Area will see another financial holocaust this time around? My best guess is no for several reasons. It was predicted that the Bay Area would recoup all the job loss by 2012 but that prediction was before outsourcing in the tech industry, the obvious driving  economic sector in the Bay Area. Companies laid off all they could and they haven't rehired those numbers.

True, new companies like Google have added significant employee numbers but their continued growth rate will seemingly sustain most of the recent hiring growth. They are shedding contract employees by the dozen. In 2000-2001 we saw over 3000+ startups and small companies close their doors. During the Great Depression about 5000+ banks closed. I know this is not a completely fair comparison in financial losses but not in employee losses. And one was regional while the other was national.

What I am getting at is that the blood has been let in Silicon Valley and there isn't any huge amounts of blood left to let. Yes, we will have layoffs but not to the level of total economic shut-down. Companies will continue to hire at the same time they let go. They did this in the 1980's recession.

Much of the unemployment numbers to date have come from the financial services sector according to my contacts at the EDD One-Stop career centers. And those numbers are nothing like the tech crash. At Pro-Match they had until recently about 150 people participating in career services. This number was double in the tech crash with an equal waiting list.

And Bay Area/Silicon Valley professionals "get" career management, professional branding, and on line networking. Think about it, social networking was invented here. Do I need to run through the list of companies starting with Linkedin.com? There is no workforce better prepared to face a downturn and lay-offs.

Bottom line, yes, it will be nasty around here for awhile but it won't be a complete economic body shut-down like we saw 9 years ago starting March 10, 2009. More people are consulting now and companies will continue to rely on them for talent augmentation even while they are cutting jobs. Yes, there will be some culling and older workers will be affected. However companies know that they can't cut talent that they will need in 18 to 24 months. They know that the talent shortage is still there just dampened right now..

Baby boomers who can retire may start leaving in greater numbers and at a faster rate to take advantage of the housing deals in the former real estate boom areas. But that's good as it will keep home price rises more subdued for awhile and that will help.

All in all, it could be worse here and it isn't. If the next administration makes good on its pledge to spend on Green Tech we should be looking pretty good, compared to the rest of the US.

Leveraging Google’s Orkut

The glut of social networking sites can overwhelm your ability to discriminate among them. There are, though, statistics on the big ones that enable anyone to pinpoint their networking goals to demographic targets and geographical areas with at least side-of-the-barn accuracy.

Ecademy was founded by Thomas Powers in Great Britain and is known for a solid European base of members. A recent newcomer to that geo area is multilingual Viadeo having originated in France, it is considered an upcoming competitor to Linkedin for EU professionals.

The most interesting news of late is the Business Week article about Google's plans to expand Orkut, its invitation only social network. The article lamented the fact that Orkut had geographical limitations. Perspective is everything, right? What is one person’s poison is another’s perfume.   

According to Business Week, “…..Asia and Latin America, which account for nearly all of Orkut's 24.6 million monthly users, the site's traffic remains simply anemic—totaling just 600,000 in North America and about 1.2 million in Europe, and not growing very fast.”

This is a problem?

Perhaps for Google it is a business concern but not for recruiters, deal makers, business developers, job seekers and geo-focused networkers who seek contacts in those areas. Orkut is the perfect venue to penetrate Latin American and Asian markets which adds up to about to about 22.6 million potential connections, especially in Brazil.

The old saying goes something like: to catch fish you need to cast your line in water. Same holds true for social networking sites. The idea is to join those sites that most closely target the population that you seek. 

My offer to you to join Orkut.

I was invited to join Orkut when it first started several years ago. If you are interested in networking in Asia and Latin America please add a comment to this post. In return, I will invite you to join Orkut using the email address you left with your comment. Please don’t send me an email, the quid pro quo here is the trade of a comment for an invite.