Survivors: Can you be forced to take time off?

Layoffs: The human side Kristine Hanna, CEO, Girl Geeks

 
Survivors of the dot-com shakeout say life in the technology world is just a shadow of its former self. After thousands of their fellow tech workers were laid off, the ones still standing find themselves working longer hours, taking on more responsibility yet earning less money.

Employees who were once high-spirited and relaxed are complaining of nervous stomachs and have adopted a hunker-down mentality as they wait for the other shoe to drop.

CNET Radio and CNET News.com explore the plight of these tech workers by taking a look at the new dot-com culture, which is laced with hiring freezes, budget cuts and scores of layoffs. Tune in to CNET Radio's weeklong report, "Dirty Deeds Done Dirt Cheap," airing this week at 7:20 a.m. and 5:20 p.m. PDT on 910 AM in the San Francisco Bay Area. The radio segments will also be available online each day at News.com.

Dot-commers get dose of reality
Budget cuts and layoffs are nothing new to the corporate world, but they're painful revelations for a generation of tech workers.

Mandatory vacation. Unpaid time-off. Are these moves legal? "If companies are doing it as a policy with all of their employees, then it's OK," said Baldwin Lee, co-chair of the employment practice group with Farella, Braun & Martel. (1:52)

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Announcing companywide layoffs without notifying individual departments is bad, but layoffs via e-mail is even worse. Employment experts say companies shouldn't expect much productivity in such an environment.  (2:02)

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By Greg Sandoval
Staff Writer, CNET News.com
May 8, 2001, 4:00 a.m. PT

SAN FRANCISCO--At some technology companies, surviving a round of layoffs isn't always good news.

You could, for instance, be asked to work longer hours, take a pay cut or accept more responsibility without a promotion.

"It certainly isn't as much fun working in the tech industry," said one woman who works for a content-management company here.

What a difference a year makes.

Before the Internet gold rush came to a screeching halt, "fun" was a common word used to describe a major difference between the dot-com culture and the stuffy workplace atmospheres of old. It was particularly appropriate for the young work force that was ostensibly leading the world into the Information Age: Skateboards, free sodas and foosball tables all became clichés of a new work ethic that blurred the lines between productivity and recreation.

But as businesses began to collapse and employees were left by the wayside, this friendly and informal stereotype quickly gave way to the cold realities of economic decline: budget cuts, hiring freezes and round after round of layoffs. Such realities are nothing new to the corporate world, but they're painful revelations for a generation of workers who had never experienced anything close to a recession in their relatively short lifetimes.

"Some of these changes are hard on young people who have never experienced a downturn," said Dee McCrorey, who runs a management coaching and consulting business. "They've been catered to, they called their own shots. Now some are being asked to work in more bureaucratic environments."

A microcosm of that sober awakening can be found in a small area in this city known as South Park, considered by many to be the heart of the Media Gulch district that served as ground zero for the new media revolution. Just blocks from the buttoned-down Financial District that it once openly mocked, South Park is an odd mix of converted warehouses and conspicuously upscale restaurants and, by night, is a gathering place for street vagrants.

Many workers interviewed by CNET News.com expressed fear, anger and disillusionment over their sudden reversal of fortune at this epicenter of dot-com mania. None wished to be identified for fear of retribution, but all had compelling firsthand stories that cast the New Economy's downfall in sharp relief: pervasive fears of layoffs, employees asked to do more to keep companies afloat, workers required to pick up the slack from departing staff without additional compensation.

"I think with all the layoffs, everybody has known for some time that management has a gun to our heads," one software salesman said. "But now they're squeezing the triggers a little bit."

Adding insult to considerable injury, the perks that were emblematic of the high-tech boom are disappearing. Gone are the foosball tables, black-tie dinners, and free soda machines and food at many companies.

No free lunch
Just a couple of years ago, staffs were treated to free lunches, dinners and "all the beer you could drink," one 25-year-old tech worker said. Arcade games, launch parties featuring famous entertainers, and generous salaries with stock options were the norm. The geeks were in demand, and companies held nothing back to compete for them.

Another worker said her company used to pop for extravagant meals for employees. But in February, it laid off 25 percent of its staff and things got tight--even snacks in the company kitchen became scarce.

"I miss the Dole juice bars we used to get for free," she lamented.

In many cases, the cutbacks are simply a function of reality--not retribution by managers eager to turn the tables on demanding employees who were constantly courted by recruiters and competitors. Costly perks are part of the reason some companies collapsed as investors lost confidence in their ability to run tight ships.

Now, tech executives must get more out of workers while paying less. Some companies have turned to contract labor. One worker at an Internet marketing company said he was laid off and then rehired weeks later for less pay.

"I really didn't want to, but that was the best deal I could find," he said. "While I was out of work, I saw the (job ads) drop from 80 listings down to three."

About 232,020 technology workers have lost their jobs this year alone, according to Chicago-based outplacement firm Challenger, Gray & Christmas. The firm estimates that more than 700,000 technology workers have been laid off in the past year.

Jack of all trades
Some employers are requiring workers to wear more hats. One employee said that although he is a salesman, he has been asked to take on some business-development duties.

A media executive that was recently laid off said he pities his former assistant. "She must take over all my duties and receive no extra pay or promotion," he said.

In this climate, it is inevitable that companies will lean on employees a little to survive, McCrorey says. But she said she believes that workplace Darwinism will help the fittest.

"This will show us who the real leaders are," McCrorey said. "The people who can adapt to change and anticipate it even."

That is of little comfort to many of those in the midst of this painful, staff-reducing evolution.

"Not knowing on a daily basis whether you're going to be next has given me stomach cramps," said one woman who works for a large Silicon Valley networking company.

That kind of uncertainty takes its toll on middle managers as well. One supervisor at a Web site that offers medical supplies said her company laid off workers last Monday, and then a superior asked her Thursday to come up with a plan to make even more cuts should the company not meet its earnings goal.

"She called it a worst-case scenario," the employee said. "It sends a scary message that nobody is safe."