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Slumping economy changes telecomm forecast

By Suzanne Sprague

DALLAS – [Ambient sound from a bar. Man says: This is a list of all the exhibitors and they'll be to your left.]

Suzanne Sprague, KERA 90.1 Reporter: It's a Tuesday afternoon at a giant sports bar in Dallas. Normally, you'd expect to hear talk about the Cowboys and Stars around the pool tables. But today is different. Today is the Pink Slip Happy Hour.

Woman at bar: I worked for Ericsson and back in April I was one of the ones who got laid off in their big lay-off.

Man at bar: I was working for a consulting firm, but consulting firms don't have so much business, especially in telecommunications.

Second man at bar: It's a bit slow right now. The recruiting process is a bit slow.

Sprague: The Pink Slip Happy Hour was launched locally by a group of technical recruiters, who saw the same program underway in California and New York. Every few months, Gayle Houston and other organizers host a dozen or so employers at a local bar. The companies set up booths and talk to applicants, who also come for resume and career advice.

Gayle Houston, DFW Technical Recruiters Network: This is a total word of mouth, grassroots effort. Everything is done for free for both the employer and the applicant. And thank God for the Internet.

Sprague: Houston hasn't tracked how many jobs have come out of what she calls the reverse career fairs. But at least the casual and encouraging environment is a welcomed break for the frustrated and unemployed, like Cristina Smith, who was an IT trainer for Ericsson until she was laid off in April.

Cristina Smith, Job-Seeker: It has been very difficult. I want to say back in April, before the summer hit, there were a lot more jobs that were available; and I found that every time I go to different career networking groups, they were getting larger. Employers are getting a lot more specific in their needs, and there are just a lot more people out there competing for the same type of jobs.

Sprague: During the past year, some eight thousand jobs at high tech companies in North Texas have been cut. More bad news hit last week, when Alcatel announced it would cut 650 jobs from its headquarters in Plano. According to Pink Slip organizer and recruiter Nancy Canutson, laid-off workers seeking new jobs have found the telecom tide of signing bonuses and company cars washed away.

Nancy Canutson, Recruiter: The good days of really high salaries for some of these jobs are finally, they're pairing them down to more realistic numbers.

Sprague: So, Canutson and Houston have been telling out-of-work techies to lower their expectations.

Houston: A lot of the dot-com people are starting to demand severance package guarantees; and what we're explaining to the people who are laid off right now is that now is not the time to demand that, because there's so much competition, especially in the high tech world.

Sprague: This downturn hit especially hard because a lot of affected high tech workers have seen only phenomenal growth in their professional lives, even if they're in their early 40's.

Don Hicks, Professor of Political Economy, University of Texas at Dallas: So it comes as a really nasty surprise that there are these rhythms and cycles in an economy.

Sprague: Don Hicks is a professor of political economy at the University of Texas at Dallas.

Hicks: My little John the Baptist message here is that they're not only natural, they're incredibly useful. They wring excesses out of the system; they allow capital, including people skills, to be reallocated to new activities.

Sprague: Steve Racz, a former project manager at Nortel, helped start Grand Slam Talent, a networking group exclusively for laid-off Nortel employees. About 1000 people joined. Racz says 300-400 have left, presumably because they found jobs.

Steve Racz, Grand Slam Talent: When things were good, people didn't really work together all that much. Now that things have turned down a bit, I think that they're leaning more toward working together, and this is just one way of doing that. I was of the old school. I had been with Nortel for 16 years, and I felt like I was going to stay there forever and retire from there. Having left corporate America at this point, I see that there are so many different opportunities.

Sprague: Racz is bullish on the future of high tech in North Texas. He and several other members of Grand Slam Talent have formed their own private companies in the wake of layoffs. And, according to UTD's Don Hicks, that's where the job growth in the area's telecom industry lies.

Hicks: Many of the major companies have been hungry for our talent - management and engineering talent - for a long time, and the smaller companies haven't had an opportunity to get a hold of that talent. Now that the big companies are experiencing hiring freezes, many of the smaller companies have opportunities to absorb and attract some of this talent.

Sprague: Smaller companies like Atrana solutions. Atrana, which provides computer networks for retail sales, employs 24 people in a restored old building in downtown Dallas. President Craig Tiritilli is giving a tour of the exposed brick offices and break room, complete with Tetris and Atari video games.

Craig Tiritilli, President, Atrana Solutions: And, actually I'm surprised there aren't people out here playing them right now. Usually, when you walk out here, there's somebody out here, playing one of them.

Sprague: Tiritilli believes Atrana could double its staff in the next year. That's easier now than it would have been a year ago in a tighter labor market. But Tiritilli says small high tech companies can't afford to make hiring errors, so the application process remains intense.

Tiritilli: So when we look at people, whether it was when the job market was tight or now, we have to evaluate them very closely. Before, there was just a lot fewer applicants. Now, we have a larger pool to select from, but we go through the same steps now as we did then.

Sprague: However, Atrana has not scaled back on job perks - private offices, a fully stocked kitchen - even though the scales of the job market have tipped in its favor.

Tiratelli: In a lot of press, we've read that a lot of companies are lowering the benefits they're providing to their employees because they don't have to do that to get them or to retain them. We haven't taken that approach. We value our employees very, very highly, and we want them to be very comfortable in their work here and at home. So the types of benefits we offer, we still offer.

Sprague: The big question left unanswered is how September 11th has affected and will continue to shape the high tech industry. Some analysts say there's no more fat to trim in the telecom corridor, so it can't get any worse. They're hoping laid-off workers will remain in the region so that when the industry does bounce back, it will bounce back here.

For KERA 90.1, I'm Suzanne Sprague.