patrick.net

The Economic Crisis is a Test of Character
http://www.huffingtonpost.com/penny-herscher/the-economic-crisis-is-a_b_151799.html

One recent example is of a senior manager let go from Cadence Design in their recent layoff -- anxious to get a reference from me as he tries to get a job at Synopsys -- the only other major company in the EDA industry but more of the same. This guy is 40. By doing the obvious thing he was missing the opportunity to break out and change his career into an industry that is growing vs. EDA which has some serious structural issues. I walked him through the thought experiment of what his career will be like 10 years from now based on the choices he makes today. It's a sobering exercise and as a result he's now looking at growth industries outside of EDA too.

In another case I had dinner with a friend last night who spent the first 30 minutes complaining about how hard it was, how depressing, how difficult to get the other people in his firm to deal with the challenges, and after allowing him the indulgence I then verbally smacked him. He has a choice. He can be dragged down by the reactions of the people around him, or he can step up and lead them out of their issues by driving to decisions without giving in to the indulgence of complaining. In his case it's a choice of self discipline -- to habitually lead instead of giving in to the emotion of the crowd. (I'm fortunate that we're good enough friends that he stayed for dinner instead of telling me to get lost at my presumption).

In contrast I am inspired by my girlfriend who runs a Silicon Valley recruiting business which is severely challenged by the downturn, and has had a host of health issues, and yet she leads, smiles and soldiers on. Or my board member who runs a hedge fund and describes his daily life today as "catching falling knives" and yet he stays strategic, stays focused on executing the long term opportunities this market is creating and still has time to advise me and make me laugh. At least I was able to make him laugh too by suggesting he wear leather gloves.

I am seeing cap rates of 20% with Section 8s.

WOW! If that is occuring in enough towns or smaller cities, that is a strong invite for British style "Council Housing." The Obama administration philosophy, along so many vacant houses, may add more incentive for such gov owned and managed rental homes.

You are also gambling that Sec 8 will not decrease the allotment. A real risk when tax revenues are decreasing.

I plan to pick up rental property when the price is right, but I want market renters with jobs, I will not do Sec 8.

WASHINGTON — Cadence Design Systems Inc. said Wednesday (Nov. 5) it will lay off 625 full-time workers, or 12 percent of its global workforce, in an effort to cut operating costs.
The job cuts, along with elimination of a "substantial number" of contractors and consultants, is expected to result in at least $150 million in savings, the company said in announcing its delayed restructuring plan.

In a research note published Thursday, Needham and Co. analyst Rich Valera said that including the contractors and consultants the practical number of employees let go by Cadence would be at least 15 percent.

Cadence (San Jose, Calif.) was to have announced details its restructuring plan along with third quarter financial results last month, but delayed the disclosure to complete an accounting review.

Michael Fister and four other top executives resigned from Cadence on Oct. 15. Industry observers immediately predicted Cadence would lay off workers in an attempt to survive in a shrinking EDA market.

In a statement, Cadence said it would complete the restructuring in the second half of its 2009 fiscal year. It expects to record a pre-tax restructuring charge of as much as $70 million.

In principle I'm also against section 8, especially in California where living here is a luxury. However, in the South that seems to be the only infusion to create a local economy. I don't want to give too much away but the area I'm investing in is quite nice and ridiculously cheap.

Losing Section 8 I think is unlikely, if it was pulled suddenly there would be riots and civil unrest. And BAP, I agree with you also, it is a transfer, but at least a value-added one. I figure if it is there, you may as well capitalize on it.

Have you watched:

Michelle Chappel - Screw You Yahoo
http://www.youtube.com/watch?v=_Gn4soId0EM

Michelle Chappel, who created the video above, writes in to give us her view of the fall of Yahoo from an insiders perspective:

I have a news tip about a topic you’ve covered: the Yahoo layoffs.

I’ve been a consultant/contractor at Yahoo three different times. It’s one of my favorite companies to work for–including AltaVista, Google, TiVo, and eBay–because the people are so nice there! Here is some background information on what it was like to be at Yahoo right before the fall, as well as a recount of my experience on “Layoff Day.”

The fact that Yahoo would be having another round of layoffs was first announced at a company-wide meeting an hour before Yahoo threw a huge Oktoberfest party in which beer, bratwurst and German chocolate cake were served to everyone on campus. A week later we received sparkling wine and cupcakes to celebrate a recent Developer Network (YDN) success. Many people were curious as to why so much money was being spent on these parties, not to mention the upcoming Christmas party, because Yahoo was in such dire straights.

The layoffs were preceded by a massive re-org. Suddenly we were having lots of meetings with people we’d never worked with before. The rumor going ’round was that if you were a manager with fewer than 5 reports, you’d either be demoted, or fired. One woman who lost all her reports packed up her desk weeks in advance of layoffs because she couldn’t take the pressure anymore. She’d always seemed so sure of herself before. A couple of others told me they secretly wished they’d be let go because they were sick of all the changes at Yahoo this past year. One girlfriend admitted she was very angry about it all, and that Jerry Yang had screwed up. But most people at Yahoo stayed quiet… and tried to be good… and extra dutiful… to save their jobs.

Towards the end, some of us were asked to submit reports again and again, and we all knew it was so that the powers-that-be could determine who would stay and who would go. Some people just stopped working altogether because there was nothing to do. We were pretty sure folks were going to lose their jobs on December 10th because all the classrooms had been booked on that day. But at meetings right before Thanksgiving, the date “December 10th” wasn’t even placed on timelines on whiteboards. It was as if nothing was going to happen, even though we all knew layoffs were inevitable. The VP of my division sent LinkedIn invites to all his reports in late November, so we figured that meant he was going to be asked to leave. But we weren’t sure because he was such a stellar boss. It made no sense. It was a crazy time.

On the day Yahoo was having layoffs I recorded a music video called “S**** You Yahoo”: http://www.youtube.com/watch?v=_Gn4soId0EM&fmt=22

It broke my heart to watch friends and co-workers worry about whether they’d lose their jobs. I wanted them to know they’re not alone, encourage them to have hope, and maybe even make them laugh a little. The video even proposes an out-of-the-box solution to our trying economic times. I used your layoff tracker and Yahoo piece (12/10/08) for the statistics in it. (Best to watch it in HD so you can read the signs.)

I hope this background information is interesting to you, and that you enjoy the music video. This song is not just about Yahoo, it’s about all companies having layoffs right now. It would be terrific if you’d consider doing a story on this to help raise people’s spirits during this economic downturn.

Happy Holidays!
Michelle