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Paved Paradise: Faces of the IT Recession

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The stock market is back above 10,000, and the NASDAQ continues to climb. Yet the IT workers who once helped deliver the promises of productivity to Wall Street and the world are still struggling to shake off the worst IT recession in history.

Stories from the Trenches

During the past two years, I've been collecting stories from dozens of IT professionals as they have tried to weather the economic climate that has devastated their careers. The collapse of the dot-com investment bubble, the furloughing of developers and network personnel, and now the plague of offshore outsourcing have all been events that have transformed the terrain in which IT professionals now work.

All of these profiles came to me unsolicited in response to articles that I have written for MC Mag Online between 2002 and 2004. These professionals want their stories told, but they want their names withheld: They do not want to draw attention to their personal tribulations; they simply want to bring to light that something is seriously wrong in the IT industry today.

These are their stories, with names, companies, and places changed to protect their privacy. Yet, even so, you may be surprised by what you discover in these stories. You may be chastened by the faces that you recognize, anonymous though they may be. This is IT today, in the aftermath of the IT recession.

Meet Rachel: Experienced, Educated, and Competent

Rachel received her MA in Computer Science from one of the most prestigious University of California graduate institutes. She graduated with honors in the spring of 1999 at the height of the IT shortage. She had the recommendation of her graduate advisor and was quickly recruited by a business software organization that was developing a new Supply Chain Management (SCM) package to replace legacy tool-building code. She was assigned to one of four teams writing applications in Java. Previously, before taking her advanced degree, she had worked in manufacturing, writing programs in IBM's RPG language and COBOL. But she decided to return for her Masters in Computer Science to further her technical skills and improve her credentials. She loved programming and had a natural knowledge of manufacturing and the requirements of SCM. She had hopes to one day become a Chief Technology Officer in a start-up Internet organization. But for now, she was happy. She was well-paid, with an excellent starting salary, and she had already managed a number of important projects.

"With a pink hotel, a boutique
and a swinging hot spot"

At the end of the second quarter of 2000, her company's capital investment strategies began to fail. The company had recently obtained new investors who were now growing uneasy with the market's future. By the following September, it was clear that layoffs were coming, but her manager encouraged her to ignore the phone calls from headhunters and to stay with the organization. Her position, he told her, was safe. The worst that could happen would be a reduction in the number of teams, and she would be transferred to whatever teams remained.

"They paved paradise
And put up a parking lot"

In November, the entire development team received pink slips--all four teams. Even her manager was laid off. Suddenly, everybody was out of work. Calls to recruiters were not returned. Was it because of the holiday season? Or was something else going on?

Rachel's longtime boyfriend, who worked as an IT administrator in another company, also found himself out of work. Together, they weathered the Thanksgiving and Christmas holidays of 2000, but between January and March of 2001, neither of them received a single response to their resumes.

From Programming Chips to Serving Salsa

In March, Rachel took a temporary job to make ends meet waiting tables at Chile's restaurant in San Francisco. A month later, her boyfriend was there, too. "The restaurant manager told me that he was receiving close to 20 applications a day for wait positions," she said. "All of us would kid the customers. We'd tell them 'We used to program chips for your servers, but now we serve you the chips for your salsa!' All of us were out-of-work IT professionals and dot-com-ers."

"Late last night
I heard my screen door slam
and a big yellow taxi
Took away my old man"

Her long-time relationship with her boyfriend ended when he moved to search for work in Washington state. (She says the move was unfruitful, and he is now picking up odd jobs as a freelance Web designer.) She, in turn, moved back to her hometown in Ohio to live with her mother. "The rent in the Bay Area was just too much. Even when they cut the rents in half--because so many places were vacant--I couldn't make it work. I had too much debt left from grad school. At least here, in Ohio, I can make rent."

Rachel Today

Rachel now works for a large regional retail tire distributor in the Akron area. She is still in IT, but her prospects and plans have evolved. "I seldom get to touch code anymore," she wrote. "I had to remove my MA from my resume just to get this job, and the only reason they hired me was because I knew ILE RPG and the SCM code that runs the company." Her dream of becoming a CTO is now on hold. She's planning to apply to law school in the fall of 2004.

Meet Ezra: Experienced Professional Consultant

Ezra had a long history as a successful consultant in the Los Angeles/San Diego area. He says people liked his hands-on practical approach to problems. He'd started in IT supplying programs for hand-held data collection terminals and then moved gradually into application development, working primarily on the AS/400 in the distribution industry. His consulting contracts were usually one and two year stints, and at the height of the 1990s, they normally included an option to convert to a permanent position.

The Fork in the Road

In the spring of 2001, Ezra was facing a career choice. He and his wife had just started a family and wanted to move away from the congestion of LA. His contract was about to expire, and although the company wanted him to convert his position, Ezra was hesitant. Two separate companies were bidding for his services in the Salt Lake area, and the time seemed ripe to make the move to a more relaxed and less expensive environment. They took the plunge and moved to Utah in June of 2001.

Unfortunately, the first position didn't work out as planned. He lost his job in December after 9/11 and stayed without work until August of 2002. "This eight-month stretch was a searing experience," he wrote. "It seemed like most Utah headhunters were out of business, and the ones that weren't didn't respond at all. Most of the LA-area headhunters I knew were out as well. Of course, by then I was considered an out-of-state candidate and local-only was the order of the day."

Experienced Persons Need Not Apply

For the first time, Ezra found his past experience--working on substantial projects in a variety of different environments--actually a hindrance to his job prospects. Managers would look at his resume and question his past work ethic as a consultant. "I was treated as a pariah by companies seeking staff hires. The term 'stable work history' was used pretty often, as though supporting your family for years was a clear sign of instability and a lack of commitment."

Ezra Today

Ezra eventually found a short-term contract at a low rate in another state and worked there until his former Utah project manager landed a spot in a Boise-area company and brought him in on contract. This was quickly changed to a permanent position. "I've been here as an employee for over a year now, and I'm bringing my family out this summer. The business is distribution with mostly custom code and with the management working closely with IT. It's good, solid, steady work, which I value a great deal."

Meet Anne: "We Made a Difference!"

There is a commonly held belief that the IT struggle is restricted to developers, consultants, and lower-level IT administrators, but Anne's story is of a different sort.

Anne was the VP of IT and CIO of a moderately large retail manufacturing and distribution organization in the Atlanta area. She had worked her way up through the ranks over a period of 15 years, first as a consultant, then an analyst, and then a series of management positions. Her company grew by acquisition and consolidation, parlaying a highly recognized brand name within the industry while inheriting numerous and varied IT systems along the way. Over a period of 10 years, Anne created a dedicated staff within IT, consisting of six developers, a program analyst, two help-desk personnel, and a rotating group of consultants, as well as three PC IT administrators and a crew of operators to run eight AS/400 and iSeries servers in five locations across the United States. She was effective with management and exceedingly knowledgeable about the state of her company's industry. The CEO and president considered her expertise vital to the company's long-term planning, and she was invariably on the lead team that went out to investigate prospective purchases for the company's continuing acquisition plans.

Consolidating the Consolidator

In 1999, the parent company itself was purchased by a smaller but cash-rich competitor--a company that had no systems itself but was heavily invested in outsourcing IT functions to a large international third-party organization.

Anne's first reaction, at the behest of her CEO, was to cooperate in every possible way. "He said the company was small and inexperienced. They'd need our systems to make a profit," she wrote. "But as we progressed through the first series of meetings, it became clear to me that they were out to gut our systems. They had no intention of operating the business. They were going to outsource everything. Not just IT. Everything!"

"Hey farmer farmer
Put away the D.D.T. now
Give me spots on my apples
But leave me the birds and the bees

Over the next two years, Anne gradually became a thorn in the side of the new company's CIO. "We would get memorandum from the outsourcing company, telling us that on such-and-such a date they would be replacing all our iSeries PC Support software with Brand X software. Why? Because the IBM license fees were too much! But we had literally hundreds of applications that had been optimized over the years to use specific IBM APIs within the production process. Just determining how such a change would impact us would have taken months to figure out."

Budgetary Showdown

In June of 2002, Anne and her company president had a budgetary showdown with the CIO of the acquiring organization. Using the IT budgetary figures provided by the parent organization itself, Anne was able to show not only that her staff and her systems were cost-effective to the operation of their company, but that by expanding those systems to meet the needs of the entire enterprise, she could save the parent organization vast amounts of money compared to the existing contracts used for the outsourced services. The uproar that followed, within her own organization and within the parent organization, culminated in Anne's quiet dismissal 14 months later. While she is not allowed to publicly talk about the circumstances--and would not confide in me the final reasons for her severance--it was clear that she was exhausted.

"They took all the trees
Put 'em in a tree museum
And they charged the people
A dollar and a half just to see 'em"

"I stayed because of my staff," she said, "and because of the good work that we were doing together. I was loyal to the corporation, and I did everything I could to fulfill the responsibilities of my job in IT. I'm not angry, but I'm sad that the mission of the organization had changed so much. We were a good team! Maybe not the most advanced, but certainly the most cost-conscious. We made a difference to that organization! We were denied the opportunity to do more!"

Anne Today

Today, Anne's former company is operating with a skeleton crew of system operators doing double-duty as IT network administrators. Most of the company has been outsourced to foreign manufacturers. The rest of her crew has attempted to find other positions in a difficult IT market. Some have been lucky.

Anne herself has been out of work for more than a year. She's not certain exactly what her next step will be. She says she's doubtful that it will be in IT.

Thomas M. Stockwell is Editor in Chief of MC Press, LP. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Thomas Stockwell

Thomas M. Stockwell is an independent IT analyst and writer. He is the former Editor in Chief of MC Press Online and Midrange Computing magazine and has over 20 years of experience as a programmer, systems engineer, IT director, industry analyst, author, speaker, consultant, and editor.  


Tom works from his home in the Napa Valley in California. He can be reached at ITincendiary.com.





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