A new wave of pink slips hit tech jobs

January 23, 2009 6:49:05 PM PST
The state's jobless rate is now up to 9.3 percent. In Silicon Valley specifically, the jobless rate jumped .6 of a percent in December. Job losses continue in construction and financial services, but retail and tech workers are now part of a new wave of pink slips.

The waiting area at the unemployment office reflects the growth in the jobless rate. Applicants for benefits can file from home, but they still show up here.

"So they come in here to use the phone, and we've had as many as 70 people waiting to use the phone on any given morning. It's about a 400 percent increase in traffic in the office," says Janice Shriver, a state labor market consultant.

Silicon Valley's biggest jump in unemployment last month was in the retail sector as sales took a dive. The South Bay lost 600 retail jobs between November and December. Typically, 2,700 jobs are added as stores bring on extra help for the holidays. There are now 5,900 fewer jobs in retail in Silicon Valley, compared to a year ago.

Lisa Bell, a job seeker, is part of a new wave of tech company layoffs.

"I hope in my heart that it won't be very long, but I have a feeling it's going to be another nine months at least," says Bell.

As more tech workers are laid off, economists are concerned it will trigger more job losses.

"We're also going to see an added negative effect for those in the retail and service sector. We're starting to see people in the hospitality and the leisure sectors hurt," says Sylvia Allegretto, Ph.D., from the U.C. Institute for research on labor and employment.

As the jobless numbers rise, so does frustration.

"The system has let me down. Come on. We're spending a lot of money outside, and we can't even take care of our own. And we're willing to work," says Joe Gabucan, a laid-off worker.

A major concern in the valley is providing a safety net when it might take a year to land a new job.

"People are in need of basic services. Food shelves are being stretched to the breaking point. We're also finding that job training is going to be essential. We've got to rebuild that capacity. We don't have it right now," says Emmett Carson, Ph.D., from the Silicon Valley Community Foundation.

As bad as today's numbers are, the numbers next month could be even worse, a reflection of some of the technology companies that have done large-scale layoffs earlier this week.