Laid-off high-tech workers ending up in shelters

The Associated Press
Saturday June 16, 2001

SAN JOSE — Mike Schlenz, who recently installed computer networks for a living, had been sleeping in his Honda Civic for three months before he went to a homeless shelter. 

John Sacrosante, who earned more than $100,000 a year as a free-lance database engineer, spent his 39th birthday last week with the “brothers” he met at the church shelter where he has been living. 

Both are casualties of the dot-com bust in Silicon Valley, where a surprising number of former high-tech workers are rubbing elbows with society’s castaways – the mentally ill, drug addicts and other hard-luck cases – in homeless shelters. 

“We’re all equal here,” Sacrosante said. “When you’re used to making six figures and working in a dynamic and exciting environment and all of a sudden it goes away, you do have a nice little world of depression going on.” 

Nearly 30 unemployed tech workers are among the 100 men at the Montgomery Street Inn and other shelters in San Jose run by InnVision, said Robbie Reinhart, director of the nonprofit organization. 

“They’re not what we used to call hobos on the street. Most have college degrees,” she said. 

Dot-com failures sent San Francisco’s unemployment rate up to 4.2 percent in May from a rock-bottom 2.6 percent a year ago – with 18,000 people added, according to a state report. 

In Santa Clara County, the heart of Silicon Valley, layoffs in electronic equipment manufacturing and business services rose for the fifth straight month, contributing to a 3.2 percent unemployment rate in May. 

Reinhart said most of the tech workers she sees have had their contracts canceled or been laid off from start-ups and other smaller technology companies. Other shelter residents still have jobs but don’t make enough to afford the high price of living alone in the valley, she said. 

Top consultants and contractors once named their salaries in the valley. Now, even those who qualify for unemployment benefits soon discover the $40 to $230 weekly check will not cover an apartment here, where rent averages around $1,800 a month. 

Suicide and crisis hot line operators in San Francisco and Santa Clara counties report that job-related calls nearly doubled from October to April. Many callers complained of lost jobs or feared they would soon be out of work. 

“There have always been layoffs and economic downturns, but what makes this unusual is that people in the valley have become appendages of their jobs and their workplace. They’ve worked up to 110 hours per week and slept on the conference room floor,” said Ilene Philipson, a clinical psychologist at the Center for Working Families at the University of California at Berkeley. “People have given up all sorts of things to give to their job, and when there’s a layoff there’s no other support for them.”  

Schlenz, 35, a Bay Area native with a degree in environmental chemistry, made as much as $60,000 a year as a free-lance contractor, installing Unix networks, configuring routers and working in desktop support for small companies. Then his jobs disappeared. 

“I’d been to all the job fairs. I’d followed up on all the resumes,” he said. “Some of the larger companies approached me several times, but then kept leading me on for months. Departments were downsized and outsourced. Recruiters just stopped returning messages.” 

Schlenz still has some stock, but the value has dropped. 

“I cashed in half my stocks to eat. I couldn’t even afford gas anymore,” he said. He gave up his apartment after running out of cash, and “car-camped” behind a bookstore. He showered at a gym where his membership was good through May. 

Someone told him he could get a meal at the Montgomery Street Inn, where he now stays. He volunteers in the shelter’s computer lab, teaching residents how to use computers. 

The Inn has the same policy for all its residents – stay free for a month, then pay $45 a week, whether they have a job or not. 

Sacrosante was laid off shortly after moving from San Jose to Phoenix to work on what was supposed to be a six-month project. He came back to San Jose three weeks ago with the promise of being hired by one of two Santa Clara-based technical training companies. The offers fell through. 

There’s an only-in-Silicon Valley twist to his story: Sacrosante and three other former high-tech workers who met at the shelter are launching a start-up business that will resell wearable mobile computing systems. 




Sacrosante said he will use some of the funding he secured for the venture to rent a house. 

Schlenz is still waiting for his lucky break. 

He said he has applied for an entry-level position, something for which he is overqualified, at Oracle Corp. He hasn’t told his mother in Arkansas about his situation. 

“She’d worry,” he said. But he said he now has more of what it takes to make it when a top company hires him: “After this experience, I feel I have more determination than other people.” 

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