Source: San Francisco Chronicle (August 20, 2013)
In 2012, three high-tech companies in Silicon Valley announced they were laying off a combined 48,000 employees. Layoffs continue this year, including last week’s announcement that profitable Cisco Systems was letting 4,000 people go.
At the same time, the total number of jobs in the valley and in San Francisco’s tech hub is on the rise. In fact, tech executives claim to have tens of thousands of jobs going begging, so much so that they need to bring in educated workers from overseas to fill them.
But if demand is outstripping supply, how come so many skilled IT professionals in the Bay Area are out of work? In a nutshell, job experience in the tech industry matters far less than it once did. In fact, it can work against you.
“It’s been quite a shock, coming out of my last job, which I had for 11 years,” said Robert Honma, 49, of Sunnyvale, his resume filled with senior tech positions in multinational companies and small startups. He’s been out of work for 10 months. “The Facebooks, the Googles are driven by the young.”
Mark Zuckerberg agrees.
“I want to stress the importance of being young and technical,” Facebook’s CEO (now 28) told a Y Combinator Startup event at Stanford University in 2007. “Young people are just smarter. Why are most chess masters under 30? I don’t know. Young people just have simpler lives. We may not own a car. We may not have family. Simplicity in life allows you to focus on what’s important.”
Like working around the clock, seven days a week on app development, coding and Web design, jobs in the strongest demand in the changing tech world.
Younger and cheaper
“There’s definitely a sense that companies are looking for younger and cheaper,” saidRobert Withers, a career counselor at Nova Workforce Development, a federally funded career counseling organization in Silicon Valley. “We see experienced people looking for jobs, being interviewed and not getting hired. And they’re older.”
That trend has accelerated as the industry has moved away from the traditional bulwarks – hardware, PCs, corporate IT infrastructure – to the cloud, apps, mobile and social media, which require new skills.
“The tech industry requires workers with only the most current skills,” one in which the “churn of ‘creative destruction’ regularly displaces workers even in a healthy economy,” Nova said in a paper.
According to statistics from California’s Employment Development Department, the great majority of IT-related occupations are the province of the 25-44 age group. Software application developers and Web developers skew closer to the 25-34 group – and younger. Computer and systems managers are more represented in the 44-plus group. But even here, the competition for jobs is stiff.
Managers less relevant
“There’s been a big paradigm shift, especially with the cloud. It’s made a lot of managers irrelevant who don’t have the technical experience,” said Honma.
Dan Ruth, 40, a corporate IT manager, has been out of work for seven months, which makes him, like Honma, an official member of the long-term unemployed. “There are certainly openings in my field that I’m qualified for, but it’s a buyer’s market. I’ve got a family, and while I haven’t given up hope, I’m thinking of expanding my job search to another market, like Boston.”
Paul Brunemeir, 56, a physicist who has worked his entire career developing electronic hardware in Silicon Valley, is sure he was laid off from his last job – engineering director for a small startup – because of his age, plus his six-figure salary and costly medical insurance plan. “Age correlates with experience, and experience correlates with salary. I was at the top of the layoff list because of the cost of keeping me on the roster. I would have taken a 33 percent pay cut to keep my job, but they never offered.”
“There’s definitely age discrimination, but it’s awfully hard to prove,” said Cliff Palefsky, an employment law attorney in San Francisco, who gets regular calls from older tech workers shut out of the new world. “In your 40s or 50, you’re in your prime, but not in Silicon Valley, where everything has been moved up 10 years. It makes for a particular awkwardness between an older applicant and a younger interviewer.”
‘Acting old’ is a no-no
Withers knows about the awkwardness. “Acting old” is a prime no-no in job interviews – things like wearing out-of-date clothes, talking at length about your not-especially-relevant experience, and saying to the interviewer, “My, you’re young enough to be my son!”
“It does happen,” said Withers. “This is what we see and hear from recruiters, company managers and people going through the mill.”
Then there’s the change in America’s corporate culture, noted by UC Berkeley economist Clair Brown and Greg Linden, a research associate at Berkeley’s Haas School of Business in their book on the semiconductor industry, “Chips and Change.”
Besides the problem of “older engineers who face rapid skill obsolescence and deteriorating job opportunities,” they wrote, there’s a switch in how U.S. companies regard their employees – from a “high commitment system,” which puts a premium on long-term employment and on-the-job training, to a “high innovation system.” “Engineers are typically hired because their skills and knowledge are required for a specific technology or product being developed,” they wrote. “This system is seen as cost effective, since the company can hire required skills and does not have to retrain experienced workers, who usually command higher wages than new graduates. Of course, this puts engineers, who are no longer retrained by their companies, at a disadvantage as they age.”
One result their fieldwork and data found: “a troubling drop in real earnings and a decline in hours.” To bring things up to date, add unemployment to the list.
“I’ve invested six months working out how to market myself,” said Honma. “Because the competition is so much tougher, you have to do a lot of self-promotion and branding to distinguish yourself. I’ve become much more focused in interviews. I think I’m gaining traction.”