Posted by : Chris O'Brien on Apr 10, 2006 - 05:41 PM General

Yahoo's Sunnyvale campus is feeling so 1999 these days. The company hired more than 3,000 workers last year -- about the same number it had in all just three years ago. Perks are in vogue again, with the addition of free coffee bars, haircuts and car washing. Employees must park so far away that the company started a valet parking service.
And Yahoo's not the only Silicon Valley company hanging out the "Help Wanted" sign and complaining about a talent shortage. "We have about 500 openings," said Heidi Burgett, a Yahoo spokeswoman. "We're definitely still hiring. Especially algorithmic search. If you know anyone looking, tell them we're hiring."
The hiring is being fueled by the second straight year of record revenue and profits at Silicon Valley companies. The latest Silicon Valley 150 annual report reveals that profits grew 18 percent to $37.1 billion in 2005 and revenue rose 10.8 percent to $372.6 billion among the valley's 150 largest public companies.
So, is it boom time again or is it still the bust?
The answer is a little of both. When it comes to high-tech jobs, Silicon Valley has developed a split personality. For the minority of people with the right skills and right experience, life is good again as they field multiple offers that result in escalating salaries. But for many others, the job market remains firmly shut, forcing them to accept jobs well below their experience or to consider a career change.
That's why, despite all the openings, Carl Trautman of Sunnyvale can't find a job.
The former fiber-optic technician was laid off from Agilent in August 2003. Since then, Trautman, 62, has done some contracting work, filled in as a maintenance worker and tried unsuccessfully to land a job. "I keep reading about how things are looking up," Trautman said. "But it's really deceptive. It's not true."
While some valley employers are on a hiring spree, most of it is outside the region. In 2005, Intel hired 14,900 people. Apple Computer added 3,105. Google snagged 2,659. EBay tagged 3,500.

But these gains are offset by continuing cost-cutting and restructuring, as well as by valley companies hiring in other regions where the cost of living is cheaper. According to payroll statistics from the state, Silicon Valley has only added a minimal number of jobs in the past year.

Workers in throes

As a result, the local workforce continues to undergo a wrenching transition even as companies and investors prosper.

"Silicon Valley continues to be the world's headquarters of technology, and that's not bad," said Steve Cochrane, an economist at Economy.

com. "But it doesn't mean there's going to be a job boom out there."

Prabhakar Raghavan had no problem finding a new employer last year when he left his job as chief technology officer at Verity, a Sunnyvale software company. His doctorate and two decades of experience with algorithmic search landed him offers from Google, Microsoft and Yahoo.

Raghavan became head of Yahoo Research, where he set about building a top-level team of researchers whose focus would go beyond search to include working with a variety of Yahoo services. Now he splits his time between research, management and recruiting more people like himself. "It's fair to say that in every case they have at least one other offer, and usually more than one," he said. "I don't view that as negative. It means that you're going after the top-level people."

The arms race between search engines has been good news for Santa Clara County, where jobs at Internet companies grew to 11,300 in February -- up 1,000 from February 2005. The county posted a net gain of 7,200 jobs in all industries in those same 12 months.

Google's Web site lists more than 550 job openings at just its Mountain View campus. EBay has 340 jobs posted for its San Jose headquarters.

For many unemployed tech workers, though, the problem is that many of these new jobs are high-end in pay and skills. A recent report issued by Joint Venture Silicon Valley, a local business group, noted that average pay within tech rose the past three years even as the sector lost jobs.

Case study: Netflix

To understand this trend toward higher-end jobs, visit Netflix in Los Gatos.

The online DVD rental company continues to thrive, with sales increasing 36 percent in 2005. Of its 1,500 employees, 1,200 work in distribution centers around the country helping route DVDs to customers. The bulk of the other 300 work in Los Gatos.

Most of its headquarters, staff and job candidates are focused on dealing with the increased complexity of the business. As the number of customers and the volume of DVDs have exploded, the technology to distribute the DVDs properly has become far more advanced.

At the same time, the company's Web site has become more sophisticated at matching customers with DVDs they might like. And Netflix is developing technology that eventually will allow customers to download movies.

To handle these challenges, the company needs elite engineers who are also being targeted by other employers.

"That's a relatively specialized workforce," said Patty McCord, chief talent officer at Netflix. "I'm looking for someone who has deep technical knowledge."

There are other factors compounding the woes of high-tech job seekers.

Over the past five years, tech's share of jobs in Santa Clara County has shrunk to only 26.3 percent after peaking at 31.6 percent in 2001. Other non-tech industries have been more robust, such as construction, which had a net gain of 2,200 jobs in the past year; or restaurants, which expanded by 1,500 positions; or education, which added 900 jobs.

Intel is one of the local companies that is hiring, but not in Silicon Valley. Of the 14,900 people hired by Intel in 2005, spokesman Chuck Mulloy said, the company added a "modest" number in Santa Clara, where Intel has its headquarters. Its expansion primarily occurred in Oregon, Arizona, New Mexico, Ireland and China.

Many other companies are routinely announcing layoffs and restructurings.

Under Chief Executive Mark Hurd, Hewlett-Packard announced in 2005 it was cutting 15,300 jobs -- the fourth round of job cuts in five years. In June, Sun Microsystems slashed 1,000 jobs.

Many of these cuts follow acquisitions. Symantec, based in Cupertino, bought Veritas Software of Mountain View in 2005 and eliminated 335 jobs. In February, Oracle of Redwood City said it would eliminate 2,000 jobs after buying Siebel Systems of San Mateo. And Adobe Systems of San Jose announced 650 to 700 job cuts after buying Macromedia of San Francisco.

Deceptive numbers

The fact that Santa Clara County added jobs in 2005 for the first time in four years can be misleading, said Mike Curran, director for the NOVA Workforce Board, an agency that helps job seekers. "There's still this whole churning going on."

Adobe demonstrates why the local job picture can seem confusing. Even as it cut jobs following the Macromedia merger, Adobe has 630 positions open, including 240 in San Jose, according to Donna Morris, Adobe's vice president of global talent.

"We have been fortunate to gain some great talent," Morris said. "But not everyone is a fit. Do they have the latest programming skills? In our industry, being an active learner is really key."

In recent years, many idled tech workers opted to leave Silicon Valley or changed careers.

Jeri Ann Smith got laid off in August 2003 after 21 years at Hewlett-Packard. Even with her experience, her MBA from Harvard and an engineering degree from the University of California-Los Angeles, Smith struggled to find a job in tech. So Smith got a license to be an investment adviser and joined a firm her parents started.

"It's wonderful not to have the threat of losing your job looming over you," Smith said. "I feel I have much more energy to tackle a new career here than I would at another tech company where the management could change and I'd be left out again."

San Jose Mercury News
By Chris O'Brien
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