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Job Losses: The Silicon Valley Perspective

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Today’s headlines trumpet the loss of 598,000 jobs last month — the worst in 34 years — but what does that mean for Silicon Valley, the home of technology? In order to get a sense of what’s happening with venture-backed startups, peHub talked to a local recruiter, who says it’s worse than the dot-com bust was for the Valley. VCs see this recession lasting a long time, she said, hence the deep cuts.

In other words, if you’re really awesome, you might get a job (with a pay cut). Meanwhile, over at Fortune, the pessimists are speculating that this time technology won’t save us from this downturn, alleging that the dot-com bust wasn’t even this bad because that’s when Google (s goog) was formed.

According to the article, technology won’t save us because there are no big new technologies to create jobs and boost productivity — and even if there were, no venture firms are funding them. That’s ludicrous. The big technologies tied to mobile computing, faster broadband and mobile broadband are going to make people much more productive wherever they are. Cloud computing is going to change the economics of information technology. And all of these innovations are pushing us toward — and giving us the tools to work in — an on-demand economy.

I think the way our careers and jobs are going to be managed is part of this change. A larger portion of the workforce (like it or not) is going to look more like freelancers or consultants, working on demand. That change means the government will need to step up with health care for the self-employed, and retirement planning will become an even bigger issue.

As for the funding issue, it’s true that VCs are throwing around less cash than before, but they’re still backing startups — even hunting for bargains.

Either way, the job loss and recession are hitting Silicon Valley hard, and the only way out may be the kind of shift in the way society functions. But if we’re talking about folks bold enough to build companies in their garages, I wouldn’t count them out for long.

8 Responses to “Job Losses: The Silicon Valley Perspective”

  1. New technology doesn’t mean squat if there are no buyers. The financial and insurance industries have always been big buyers of technology (also big payers of high annual maintenance fees). Who are you going to sell to? Who can afford to pay these days?

  2. well.look at “freelancer” I think I already the “victims” of the crisis”I myself now have to stay at home employee because of that but I appreciate somehow this discussion that positive intuitions still waiting on the way to fix my part in the positions of the world Technology

  3. It may be ludicrous to contend, as Fortune does, that there are no big ideas percolating in tech. But it’s less absurd to imagine that the unprecedented scale of the global financial crisis may well swamp Silicon Valley and dampen economic productivity for years to come. Why? Because in this country (and globally), finance, not tech, runs the show. The financial services biz accounts for roughly 20% of U.S. GDP and more than 25% of domestic corporate profits, far eclipsing tech.

    The question isn’t whether tech innovation will–in time–boost investment, consumer spending and productivity, thus creating jobs. It will. The issue is whether that will happen at a fast enough clip to make up for the staggering job losses and productivity decline stemming from a deepening recession. Will tech eventually lead us out of the desert? Quite possibly. But not until the financial system has time to heal. That will take years. The tech biz should buckle in and brace for impact.

    Btw, love your stuff, Higginbotham. Someone give this dame a raise.