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Dotcom bust sends techies to homeless shelters

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    Dotcom bust sends techies to homeless shelters

    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 non-profit organisation.

    "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 per cent in May from a rock-bottom 2.6 per cent 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 per cent 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.

    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 $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." (AP)

    It is Always good to have something as a back up .. i mean ... i have seen several people working with top companies on wall street they are all doing little something extra on the side... U just dont know when something can go wrong....

    unemployment rate is surely increasing....

    My Management professor... guy in military investigation something.. if a professor in university plus a mortgage banker guy...makes alot of money ... tells every single student to have something as a back up plan
    Life became all Gray! But NOW i have decided to paint it all over again.

    I Tawt I Taw A Puddy Tat


      These are disturbing news to aspiring Paki's back home, who were thinking of coming over to the US for IT related jobs.
      Hope things change there soon!