Reinventing Silicon Alley

The mighty dot-coms have fallen hard in New York's Silicon Alley, with layoffs and salary cuts becoming commonplace. Once high-flying new-media professionals are suddenly finding themselves crashing. But IT professionals are landing on their feet.

When Jesse Martinez moved to New York from New Orleans in March to pursue a Silicon Alley career, finding a job was no problem. Within two weeks, Martinez, who wanted to work in the entertainment sector of the new-media industry, had lined up a contract gig. A week later, she had garnered several full-time offers.

Martinez selected a position as a project manager and site producer at an interactive broadband services company designing Web sites for clients in the entertainment industry. The job leveraged her background in film studies, her Web production experience acquired at a small company in New Orleans and her information technology skills.

It was a position, Martinez thought, that would put her on track toward her long-range goal of moving into information architecture.

She joined the company in early April, just as the dot-com market correction hit. But Martinez wasn't worried; the company was still hiring and bringing in high-profile clients.

Six months later, Martinez was ready to ask for a raise. But as she started checking salary surveys to assess what would be a fair increase, she discovered that her company had quietly laid off a number of people in its content division.

Higher-ups were suddenly cagey about where the company's venture capital was coming from. And Silicon Alley's famed new-media companies were dropping like flies. Most notably, broadband programmer Pseudo Programs Inc., one of the city's new-media pioneers, closed its doors in September after five years.

Instead of asking for a raise, Martinez started updating her resume.

"I backed off asking for a raise because there were some layoffs, and we have a lull in production now," Martinez says. "I feel a little bad asking for a raise when I have nothing to do. I'm trying to evaluate: Is this a bad sign, or just a transition?"

Amid an atmosphere of dot-com closures and layoffs, delayed or canceled initial public offerings (IPO) and a tech stock roller-coaster ride, Silicon Alley's high-flying new-media professionals are suddenly finding themselves crashing. But IT professionals are landing on their feet.

"Experienced IT professionals typically get placed first," says Allison Hemming, who has a bird's-eye view of the Silicon Alley job market as the hostess of New York's latest cool confab, the Pink Slip Party. On the last Wednesday of every month, New York's jobless dot-commers and hungry dot-com recruiters gather at Manhattan's Rebar restaurant to share war stories and pick up job leads. Launched by Hemming's consulting firm, The Hired Guns, in June, the first Pink Slip Party ( attracted about 30 people. About 200 people showed up at September's gathering.

"Initially, it was rare that we had anyone in the IT market come to the party who was unemployed," Hemming says. "But since August, we have begun to see more folks on the IT side also get axed, especially with company shutdowns."

Although 3,000 jobs have reportedly been slashed in Silicon Alley during the past six months, the job market for IT professionals in New York remains stable. While there may be fewer companies recruiting overall, they still have more IT jobs to fill than there are qualified IT professionals to fill them.

"It's still not easy for most companies to fill their IT jobs," says Mark Cutsforth, chief technology officer at Inc., which let go 22 people - or approximately 20% of its 108 employees - across the company in September. "There never were enough tech people, and there still aren't."

What's Different

What has changed, if not the number of IT jobs available, is the caution with which dot-com employers and IT job-seekers approach each other. The dot-com correction has translated, it seems, into a dot-come-on correction. Silicon Alley hiring managers say they're taking a harder look at candidates' skills, experience and level of commitment, while IT professionals are scrutinizing potential employers with greater due diligence.

"The bubble has definitely burst. The insane hype is over, and IT professionals are looking at opportunities with a much higher level of scrutiny than they were a year ago," says Allen Ackerman, a former application developer who is now CEO of Indigo Technology Group Inc., a Silicon Alley recruiting firm. "IT professionals are seriously looking at what a [new-media] company does, looking into its financials, its backing, its burn rate - all the details that go into the survival and success of a start-up."

Companies are being forced to adjust their offers as well. The days when a dot-com could offer lower IT salaries in exchange for stock options and Foosball tables in place of 401(k) plans are definitely over. Even dot-com employers that have already gone public say today's IT job-seekers are much more interested in base compensation than stock.

David Tonkin, director of human resources at Inc., a content and community site, notes that IT professionals see options as an extra rather than a lure. "A year ago, they would take a look at base plus bonus plus options, but today they're looking at base and bonus - and, hey, if you want to throw in stock options, that's great," he says.

Likewise, the days when an IT professional could up his pay by a five-figure amount in one job-hop have ended, as dot-coms rein in spending.

"Companies aren't throwing out salaries now the way they were a year ago," Tonkin says. "IT people are still the top tier in terms of dollars, but you don't have people jumping in and out of jobs looking for $30,000 more - because they're not getting it."

By mid-October, Martinez had made a decision about her future. She says her company had begun to lay people off "in stealth mode" in twos and threes within her group; an accountant and a site producer were recently let go, for example. Figuring she better get out before she is tossed out, Martinez got on the phone with some recruiters and made plans to attend an upcoming Pink Slip Party.

She says she isn't worried about being unemployed; the dot-com dust may be settling, but Silicon Alley's IT job market still has plenty of kick.

"Life in Silicon Alley looks great from here," says's Cutsforth. "I don't think the future has ever looked better. If the Net has done anything, it has gotten many more people involved with computers on a daily basis, and leading from that - regardless of any correction - the landscape has been permanently changed. Everywhere you look, there will be IT in one form or another."

Snapshots From the Alley: How two dot-coms are faring after the great correction:


Former CNN anchor Lou Dobbs' start-up media company, consisting of a Web site, a magazine and broadband programming that features content related to outer space.

• Market status: Pre-IPO; founded July 1999

• Number of IT employees as of Oct. 1: 10

• Number of total employees as of Oct. 1: 76

• Number of IT employees laid off in the past six months: No comment.

• Number of employees laid off across all departments, including technology, editorial, design and management, in the past six months: 22

• IT positions eliminated as a result of attrition or layoffs: No comment

• Critical IT positions that would be maintained regardless of layoffs: Internal IT operations (including end-user support, data communications and database administration), Web/systems administration, content management support, back-end development, database support, network administration and architecture.

• Pace of IT recruiting since the dot-com correction: "We were ramping up a year ago, and now we're not because we have a stable, core group," says CTO Mark Cutsforth. "So we have fewer openings now. On the other hand, depending on acquisitions and expansion, that could change even in the next four weeks."

• Difficulty of recruiting since the dot-com correction: "We're a leading technological company looking toward the future," Cutsforth says. "The subject matter of space is compelling to all techies. So, if they really, really, really love space, they want to work here, and there are more of those IT professionals than I have jobs here, so I'm in recruiting heaven."

• Changes in IT compensation packages since the dot-com correction: "It's about the same," Cutsforth says. "People want a competitive salary, and we're very generous with equity."

• Advice to IT professionals who want to work in Silicon Alley: "It's still a job-seekers' market, but you have to be qualified," Cutsforth says. "Have a great set of fundamentals in core competencies that cut across different technologies - network administration, advanced technology like XML, database skills, Java and operating systems, including Unix, NT, 2000 and Linux."


A network of community and content sites.

• Market status: Public (Nasdaq:TGLO)

• Number of IT employees as of Oct. 1: 52

• Total number of employees as of Oct. 1: 232

• Number of IT employees laid off in the past six months: Not available

• Total number of employees laid off in the past six months: 51, or 41% of the staff

• IT positions eliminated as a result of attrition or layoffs: Not available

• Critical IT positions that would be maintained regardless of layoffs: Director of IT, Unix administrator, Oracle developer, C++ developer, database administrator, network engineer

• Pace of IT recruiting since the dot-com correction: "Right now we have three IT job openings," says David Tonkin, director of human resources. "A year ago, we probably had seven IT openings, but we had slowed down recruiting before the market correction in April because we were right on target. Obviously, with what's happening on the Nasdaq, we have had to scale growth appropriately, but we're always looking for NT, Unix and Oracle talent - people who have junior- to midlevel experience, with some opportunity for more seasoned people."

• Difficulty of recruiting since the dot-com correction: "People are more cautious because of the market - they want to see that the company has a solid business plan and will be around in two months," Tonkin says. "But there are still a lot of IT people who want to be in this culture. Without a doubt, being a public company is an advantage because people recognize that we must be doing something right."

• Changes in IT compensation packages since the dot-com correction: "In a post-IPO company, stock is still important, but the way the market has been going, now [stock options] are seen as more of a plus," Tonkin says. "People say [options are] great, but they don't want to take a salary cut" to get them.

• Advice to IT professionals who want to work in Silicon Alley: "Be realistic. There are some people who are unrealistic with their compensation demands," Tonkin says. "You have to take a look at what's available, but don't ask for what you're not worth. Also, do your due diligence. There are tons of jobs available, but how many of those are going to be good jobs where you know that the company will be around in a year? You have to look at the Web site, who backs the company and its business model. Try to talk to other employees."

Goff is a freelance writer in New York.

Copyright © 2000 IDG Communications, Inc.

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