Layoff-stricken tech workers find refuge in shelters

By Karen A. Davis Associated Press Writer
Monday June 18, 2001

SAN JOSE – Mike Schlenz, who recently installed computer networks for a living, had been sleeping in his Honda Civic for three months when 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’s met at the church shelter where he has been living. 

Both are casualties of the struggling economy 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 hard-luck cases — in homeless shelters. 

“We’re all equal here,” said Sacrosante. “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.” 

Across Northern California, high-tech workers who have suddenly lost their livelihoods are feeling far removed from a manic but contented lifestyle where they counted free cappuccino as perks. 

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, a new state report shows. 

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

Reinhart says most of the tech workers she sees have had their contracts canceled or been laid off from start-ups and other smaller technology companies. 

Some 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 won’t cover the rent for an apartment here, where average monthly rents are around $1,800. 

Besides being financially draining, layoffs can be psychologically wrenching for people married to their jobs, said Dr. Ilene Philipson, a clinical psychologist and sociologist at the Center for Working Families at the University of California, Berkeley. 

“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,” she said. “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.” 

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 complained of lost jobs or feared they would soon be out of work. 

Studies have shown that 12-18 months after downturns in the economy, suicide rates rise, said Eve Meyer, director of the San Francisco Suicide Prevention Crisis Line. 

“They lose their car, and they can stand it,” said Meyer. “Then they lose their house, and that’s bad. Then they may lose their family. That’s when you get into substance abuse. A year may have gone by the time they call us.” 

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 book store. 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 and volunteers as a monitor and teacher in the shelter’s computer lab. 

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 had planned to stay no more than five weeks at the shelter, where he teaches residents how to use the computers. 

It’s a far cry from the Oracle database certification classes Sacrosante taught as a consultant to major firms before becoming an independent contractor. He was laid off shortly after moving from San Jose to Phoenix to work on what was supposed to be a six-month project for a company there. 

Sacrosante 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. 

Though forced to a shelter, 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 Intellikon Technologies, a start-up that will resell wearable mobile computing systems. 

Sacrosante said he’ll use some of the funding he secured for the venture to rent a house that will double as an office and housing for the four men. 

Schlenz is still waiting for his lucky break. 

He said he’s applied for an entry-level position, something for which he’s overqualified, at Redwood Shores-based Oracle Corp. 

He hasn’t told his mother, who is in Arkansas, about his current situation. 

But he says 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,” he said.