patrick.net

I work at a company that writes software for consumer electronics.

We just had a hiring spate in late 2006 early 2007, and we're in a holding pattern for hiring right now, because we're worried about growing too fast into a possible recession.

Consumer spending cuts will definitely affect us, so we're cautious right now, but pretty excited about our products. We also have income, not just vaporware. :)

Also, this makes me mad :

Ms. Bair told reporters that many times it is in the interest of investors as well as borrowers to work out new loan arrangements to avoid foreclosure because the cost of seizing and reselling the homes is high. She suggested that some investors may allow borrowers to maintain low "starter" interest rates to prevent defaults when the rates suddenly adjust to higher market rates.
"I don't think they really will be harmed if the starter rate is just continued." she said. "What's the alternative? Foreclosure, and then they face much bigger losses."

It's from this article.

Yes, the solution is to give those irresponsible idiots permenant teaser rates.

I agree with most of what others are observing. The job market is, and has been for a while now, very robust. Not like the ridiculous late 90s boom times, but just good solid normal good.

My wife works for one of the larger public software companies and she has been importing hires (finance & accounting) from elsewhere in the country since she can't find talent locally. This has been the case for 2 years now.

I see the VC and Angel side of things and there is more money flowing into startups than many people realize. There really is too much money looking for deals. But it's not really like the late 90s boom in VC either. I'd say the number of stupid funding deals to reasonable ones is maybe 1:10 where in the 90s it was 9:10. There is a big difference with the Web 2.0 companies: many of them already have profit, and those that don't have believable business plans. I don't think it's time to call a Web 2.0 bubble yet.

I also think things will slow down by the end of the year, but I don't think this spells recession, just slowing growth. That means job losses mostly through attrition, which also means companies will still be hiring, just not net adding jobs.

Specifically the charge that Web 2.0 companies will start to flounder late in the year goes against the funding cycle of when most of these companies were funded. Except for the few very early ones funded in 2001-2002, most of these startups have at least a year or three left in their investor's portfolio life cycle. That means many will get additional rounds so long as they aren't declared dead. Some may get sold, but the nexus of acquirers are also BA companies so acquisition doesn't automatically translate into the area fully losing those jobs.

The husband works for a large japanese games developer - so - like in so many other depressions, I'd wager that his job is pretty secure.

IIRC one of the few growth industries during the Great Depression and WWII was the entertainment industry - people needed a break from the woes of the day, so flocked the the movies. My bet is that games serve much the same purpose today, so while not totally recession-proof, he has a better chance than most at keeping his job.

As for me, I have my finger in so many pies at the moment - website design, animation, crafts, and all from home - that if I lost one part of it, i'd be able to find another way of making a buck. I have a slew of hard science skills, so could go back to database management/statistics if I really had to.

If we suddenly faced his redundancy, we've got enough savings to tide us over for a few months, and I'm not too proud to go and find a job doing menial work. Although I'm a bit old and creaky, I've done everything from wait tables, worked in factories and even been an agricultural worker - I'd gladly go back to manual labour if the $hit hit the fan.

We rent, have no debt, and live well within our means. If push came to shove I'd dig up our back yard, plant it with vegetables and raise chickens. We'd never starve.

Bork

Are you a developer in telecom software? If your comfortable, what's your profile. I know someone desperately looking for telecom software talent in the area -- who's currently exploring on-shoring elsewhere in the country half because he can't find the talent here.

Perversely, this is actually also used as a spurious justification not to hope for a drop in prices -

Proof by denial, as it were.

I agree the argument is being used fallaciously by most realtors, who're just parroting rhetoric anyway. However financially it is not a self contradicting because jobs and the housing market form a reflexive system.

There is a company that produces high end bicycle bearings and other parts, that chose to move out of the bay area a few years ago. They faced the problem of not being able to pay the salaries required to own a home, raise children and so forth, in the BA. Consequently, attracting and keeping qualified engineers and people with other needed skillsets, was a challenge.

The company moved to Redding but then suffered a loss of "talent" as employees left because they didn't like the extreme summer weather of Redding. Now they couldn't find qualified new hires that wanted to live there.

A second move to Portland OR seems to have fit the bill for this company. So, I wonder how many companies today are considering a move, for similar reasons. Or maybe there are businesses here that foresee some relief in this houseing market downturn.

Afterall, the lowering of the cost of living without a drop in salary, is like getting a raise, right?

Well, the company my husband works for want to hire more people, but are finding that everyone they interview are on much higher wages and benefits than the company are paying their own people currently. Biotech.

They are also thinking of outsourcing to China - cheap labor.

I agree with the observations of most here. I'll add a couple wrinkles from my particular perch.

I work as a librarian in a large law firm and we've been flooded with web2.0 datamining and RSS outfits. Right now my firm subscribe to 4 or 5 SEC datamining services (on top of their direct access via Lexis and Westlaw). The independent outfits will either be bought out or die. Most of the jobs there will be gone or outsourced. I was talking to a woman yesterday who had worked at Westlaw and she said that West has outsourced their indexing service to India.

I don't think a lot of the legal service jobs will be here in the long haul, especially jobs not directly in contact with lawyers. There's lots of protection for lawyers and people who work directly under them due to US bar associations and confidentiality issues. But even there, I've read about big firms outsourcing support staff to West Virginia and so on.

I will say, outside of very lucky surviving few, the dot.com bust cleared out a lot of incompetent IT people. My dad said very few companies are willing to train anymore. The pay for good skills is quite good and there's a lot of demand, but you have to have a good skill set to get those jobs.

Astrid,

Amen. I was working in the dot coms (the wrong ones, unfortunately. WHY did I turn down Google?) back then, and the mouth breathers that were allowed to call themselves web developers back then truly boggled the mind.

They are back to flipping burgers again. Sweet.

Steveoh,

Yeah, watch out BA! Pretty soon the obvious appeal (10 months of BLAH weather) and our "infinitely cheaper cost of living" and there won't be a bicycle ball bearing mfr. LEFT in the BA!

All your chrome ball bearing.... things are belong to MUGGY!

Seriously, this was reported as a "major score" by the local media. I know, I know. We can have the jobs but the "Critical Mass" clowns go with the deal! I know. :(

Law related Web 2.0 outfits are tiny and don't absorb a lot of workers.

SFBB,

Unfortunately, the remaining deadwood is concentrated in defense, homeland security, and places like Fannie Mae. My dad still have to work with these types of people as a contractor. Those people are worse than worthless.

Furthermore, the 4.6% rate is still more than 2 full percentage points above 1999 and 2000 levels.

2.6% unemployment rates were an aberration and a very bad thing. 2.6% is _below_ full employment levels, and means there was a negative "real" unemployment rate. Keep in mind that unemployment rates include at least 2.5% of churn and most people think another 1-2% of "uncounted workers". Uncounted workers drop out of the tally because they are inactive too long. This means that women taking a couple years out to raise kids, people on year long sabbaticals, people doing independent consulting to fill the gap while they wait for one of those hard-to-get jobs fall out of the measure.

4.6% is pretty close to full employment. Anything more and we'll get another annoying boom and burger flippers will start pretending to code Ajax.

Randy -

"My wife works for one of the larger public software companies and she has been importing hires (finance & accounting) from elsewhere in the country since she can’t find talent locally. This has been the case for 2 years now."

Im in Finance for SW company. Here is the rub, due to SOX Internal Control (segregation of duties) you have to hire more people than you need. That is why its said, SOX is expensive. Your wife can explain this to you far more. From the lowely staffer up to CFO you are required to have someone looking over your sholder checking your doing everything correctly, and someone else is looking over theirs.

There isnt a shortage today, there is however a misallocation and loss of common sense in the profession. How many accountants does it take to screw in a light bulb... far more than needed because of goverment regulation.

"San Jose’s unemployment rate of 4.6%"

thats because over 300,000 people left the BA.
We are down to 840,000 in workforce today. The same number as
was in 1991.

Is it a good time to change industry? How do people take the leap psychologically?

Ha Ha Says:
Borland to Relocate Corporate Headquarters to Austin

I hate seeing this happen. Borland has been in BA for decades.
We already lost 3com and a good chunk of top Fortune 50 R&D centers.

High home prices are to blame.

"Some young IT guys believe in work-life balanace."

We have prezals and Pepsi in the frig at work. Some left over Pizza
from last night too.
When you get down to it, the real IT and Devoplers love
working 50-60 hours a week with very little outside
activity. This is what motivates them. You wont see them at a
Sharks Game.

From the posts so far, my conclusions are:

The dot-bomb bust cleared out a huge amount of the dead wood, those who were poorly qualified for tech jobs but were jumping on the gold rush. Many skilled tech people lost their jobs as well in the process.

Today, we're left with a much smaller pool of qualified employees who stuck around in the Bay Area. Now with many companies back to a stable growth pattern, they are having trouble finding good, qualified tech people - hence the observations of many here that hiring skilled workers is difficult. Add on top of that the significant disincentive to moving to the Bay Area from out of state due to housing costs, and these observations makes perfect sense.

Companies here can even pay qualified tech hires over 1 HaHa (on the high from what I gather), and that would still not be enough. Yes, you can buy *something* here on that salary - a condo, a stucco box in Sunnyvale, or whatever (unless you become a FB...), but how does that sound to someone moving from their comfortable 4br home on 3/4 acre somewhere else in the country?

In the end, the true lure that gets tech people back into the Bay Area is the carrot of stock options. Many of the tech folks posting here have discussed it on a personal level, and it's clearly the major driver. It's the dream of getting swept up in a new wave of ipos/acquisitions.

"Companies have been moving out of the Bay Area for quite a while."

Since 1985 manufacturing was moved to other states and then offshore.
By early to mid 90s all mfg interest was soft off to third party interestes
like Sanmina, SCI and Solectron who had operations world wide. Corporations jetisoned all their mfg. R&D back in the 80s was offlimits
to CFO cust cutting. But that too has changed.

I work for a very large health-care employer in the east bay. We are hiring, I wouldn't say the hiring is very brisk though. We have a lot of trouble finding people because very few want to live here at the wages we offer. There is no way we can adequately compensate someone for the cost of living difference compared to other areas. I don't understand why any anyone would relocate here, the jobs here don't pay that much more than other places and the vast majority of people who move here are completely priced out of the housing market.

Are you Shabba, as in Shabba Ranks?

"In the end, the true lure that gets tech people back into the Bay Area is the carrot of stock options."

Now that stock options are expensed and the options mess of over 300 companies. That game is over. Bear in mind for every IPO in 1999 5 others didnt make it. Their busted up companies were purchased for pennies on the dollar. I worked in the B2B sector back in the day.

Skibum-Yep, that's who I am thinking of.

I disagree the ISO option game is over. Many companies are still liberally distributing options. They're just doing so now under closer supervision of their audit committees and comp committees.

I don't know of any VC funded companies that aren't issuing options. Since so few plan to go public (a large number are built for M&A) they don't need to worry too much about public compliance beyond the minimum to pass due diligence. The rest is the acquirer's problem.

Few of those 300 options scandals have resulted in much of anything, including permanent stock price damage. The problem really is that Wilson Sonsini was giving *everyone* the same bad advice, thus so many companies have consistently violated pricing issues.

I work as a software developer in san francisco. My company is actively hiring across various departments.

challenge: recruiting young doctors as older doctors retire, cost of living unattractive

Small Rant: The ER situation in the Bay Area is ridiculous. A friend of mine got really sick at 4am on a Wednesday and was told by an ER over the phone that all of them were on "divert"

This 2000 article highlights how bad the problem is in SF: http://tinyurl.com/3x9zzs but it can probably be generalized to the rest of the peninsula.

I love how keep building medical centers without ERs. I can't blame them - ERs are terribly unprofitable. If I were building a hospital, I'd try to leave it out as well.

Maybe I'm just spoiled by living in a few East Coast places that had a ridiculous numbers of hospitals. At one point, I lived in a place that had 2 trauma level 1 hospitals within 15 minutes driving distance.

(Did you know that if you get into a major accident at Gilroy, they have chopper you to a hospital? It doesn't feel that remote, but it really is...)

"Small Rant: The ER situation in the Bay Area is ridiculous."

This situation goes beyond the ER. I guarantee that if you call almost any type of doctor's office in the Bay Area, you will be put on hold, sometimes for 10 minutes or so before you can even speak to the receptionist. Also, if you need a new primary care doctor or OB-GYN, good luck.

I love how keep building medical centers without ERs. I can’t blame them - ERs are terribly unprofitable. If I were building a hospital, I’d try to leave it out as well.

They should charge me.

s/me/more

This situation goes beyond the ER. I guarantee that if you call almost any type of doctor’s office in the Bay Area, you will be put on hold, sometimes for 10 minutes or so before you can even speak to the receptionist. Also, if you need a new primary care doctor or OB-GYN, good luck.

Dentists too. All true.

But I bring up the ER example because typically I can wait 2 weeks to see the Dentist. On the other hand, I wouldn't want to wait 2 weeks to go to the ER. :)

I work for an HMO in the East Bay. Demand for docs is high, mostly because of high turnover. Working conditions are abusive, and coupled with high home prices, the results are not pretty. I see a revolving door of docs come and go constantly. I feel sorry for the ones who buy a home and have to sell it within a few months to a year.

I was re-reading Robert Shiller's book Irrational Exuberance and he made a surprising (to me) claim. He said that the last time there was a downturn in housing on both east and west coasts in the late 1980s housing peaked before the economy. In Boston housing turned down in 1988 well before the recession in 1990 while in Los Angeles the real estate market started worsening in 1989 before the start of the recession in 1990.

If the housing market turned down before the economy, it is un-likely that the slowing economy caused a depressed housing market. What Randy H said "...jobs and the housing market form a reflexive system..." may be true the causation may be in the other direction. Or another factor, say "animal spirits" for lack of a better term may cause buyers to be less optimistic about purchasing a home driving down prices. Homeowners, who subsequently feel less wealthy because of declining values of their biggest asset, may reduce spending causing a recession.

Will someone who remembers the 1980s explain which came first, the downturn in housing or the worsening in the economy?

Gavin

Two tech salaries combined (200k+) should enable a young family to get a reasonable townhouse with a comfortable mortgage, assuming with 10% - 20% down-payment.

Well, if an apartment in London can be sold for nearly $200M... Bay Area is not that over-rated yet.

"I see a revolving door of docs come and go constantly."

I see this with a lot of our young doctors. One of our doctors left and became a realtor. LOL

Food in London leaves a lot to be desired for.

I know of a Web 2.0 company just got their series A but some of the engineers are already leaving because their business model is so flawed, the VC just wanted to round out their portfolio.

Regarding the dot com cleansing of incompetent people, it goes both ways, I see many managers went to director/VP level easily during that time, some of them never got purged because of politics, the result is some very poorly managed departments.

The Mercury News used to run a lot of stories about laid off tech workers after the bust, funny if you read the story closely those people never really had a tech related job before. My favorite one is a lady who lamented that she was laid off and could not afford to buy an ibook for her daughter, I guess her HELOC was maxed out.

One kid I interviewed during the boom had a stamp on his hand (from going to clubs), I was hoping he at least tried to wash it off if he was serious about the job, and he said he had 3 interviews that day :)

Small Rant: The ER situation in the Bay Area is ridiculous. A friend of mine got really sick at 4am on a Wednesday and was told by an ER over the phone that all of them were on “divert”

eburbed,

A few points on this matter. The ER "divert" situation is common in most cities. Where I trained (Boston), there are literally 5 great, large hospitals with large ERs, and we regularly went "on divert" every few days. The issue is more complicated. There are a vast number of uninsured out there, and the ER is there "primary care doctor." This takes up time and resources. The closing of ERs is a problem too, and hospitals have no incentive whatsover to expand ERs, as they are money-losing propositions. Peter P's idea to charge more is untenable, since reimbursement is completely tied to Medicare standards (set by the government), and these guideline charges are being reduced every year.

The situation is a slow-motion disaster (much like the housing mess).