http://dailycamera.com/bdc/local_business/article/0,1713,BDC_2461_4881341,00.html Page 1, Sunday, 30-July-2006 Layoffs rattle rising economy Growth offsets losses, but are new jobs as good as the old? By Greg Avery, Camera Business Writer July 30, 2006 Arriving at work at about 7 a.m. each day is like a scene from a bad science-fiction movie for Michael Walter. The engineer's short walk from his apartment to the former Maxtor Corp.'s southwest Longmont building takes him past vacant parking lots once filled by co-workers' cars and into an empty, dark building. He works by the light of his computer monitor until someone else shows up to turn on the lights. That can take hours. One by one, workers stopped showing up during the past few weeks. The cafeteria closed a couple of weeks ago. Computer drive-making rival Seagate Technology's purchase of Maxtor earlier this year has turned the Maxtor site into something of a post-layoff ghost town. "It's kind of gloomy," Walter said. "There's nobody around - five or six people in a building where there were 150 to 200." Walter is biding his time, working on a thinning list of assignments until his job is eliminated like 639 others at Maxtor's Longmont offices. It's an increasingly common experience this year in the Boulder area, diminishing what was supposed to be a growth year for the Colorado economy after years of lackluster performance. Since Maxtor's absorption into Seagate, computer processor company Advanced Micro Devices announced it would pull out of Longmont by year's end, transferring half of its 180 jobs to Fort Collins and eliminating the rest. Sun Microsystems Inc. has laid off 143 people from its Broomfield and Louisville campuses since April, according to information it gave to the Colorado Department of Labor and Employment. Another round of local Sun layoffs will be announced Thursday. Should the cuts be as deep as employees hear, it will add about another 600 people to the ranks of the unemployed. The Santa Clara, Calif.-based company is eliminating as many as 5,000 positions worldwide. If Thursday's cuts prove big, it would mean more than 1,500 local high-tech-industry jobs have disappeared in four months. The local job market is strong enough that those caught in the downsizing have a lot of chances to find work, experts said. According to a Manpower Inc. poll of area companies, 47 percent of employers surveyed expected to add new jobs between July and September. But whether they're creating positions that replace the well-paid jobs being lost remains to be seen. That could determine how much of an impact the layoffs have on Boulder and Broomfield counties' economy. Even with the layoffs, local job growth has been stronger this year than since 2001. The unemployment rate shrank in June for people living in the area, despite the high-profile layoffs, and the number of area residents employed grew by 5,596 in the first six months of the year. The bad news for those being let go is that the computer industry in the area already was shrinking. Even before many of the latest layoffs took effect, 500 computer-electronics jobs disappeared in Boulder County alone, according to state statistics. Quality vs. quantity The quality of the jobs Sun and Maxtor are eliminating is more troubling than the number of jobs cut, said Tucker Hart Adams, U.S. Bank's economist for the Rocky Mountain region. "The better the job, the higher the income, the bigger the economic impact," she said. The median annual salary for workers in the Boulder County-area computer industry topped $75,000 last year - more than double the pay of the area's typical worker, according to a state salary survey. Primary industries that produce goods and professional services generate other economic activity by supporting equipment suppliers, janitorial companies, nearby shops and other businesses, which in turn employ people whose spending creates other work. For every job a company like Sun eliminates, it deprives the region of an additional 11/2 or two jobs, due to the economic trickle-down effect, Adams said. The cutbacks at Sun alone would not be enough to shake the Boulder-Broomfield economy noticeably in times of economic strength, she said. But coming at a time when anemic growth is considered positive news and foreclosures unsettle residential real estate, the layoffs contribute to lingering weakness in Colorado's economy, she said. "I find it troubling that five years into an economic expansion we've still got companies cutting back and companies laying people off," she said. University of Colorado economist Richard Wobbekind is more optimistic about the trends. "It's not like three years ago," he said. "There are a lot of small and on-the rise companies in the area looking for skilled workers right now." Many of those laid off at Maxtor earlier this spring already have found work. Others are using a cushion provided by severance packages and savings to carefully look and try to make the next job's salary or other features a career improvement. Several, though, simply will leave the area. "People don't hang out in expensive areas like this when they're looking for work and don't have an income," Wobbekind said. Leaving the industry Walter, the Maxtor senior engineer finishing his last few days, will return to his native Germany 13 years after the computer hard-drive industry brought him to the United States. In that time, mergers kept changing the company name on his badge . Digital Equipment, Quantum, Maxtor. "Now it's Seagate, and I didn't make the cut," said Walter, 45. He saw it coming in December, when Seagate announced it would take over Maxtor. Walter, who is single, examined his options and decided that, after nearly 20 years in the computer industry, his life would be better without the pressure and constant change. If Seagate let him go, he'd move back to Germany and live off his savings. He sold his 4-acre property outside of Berthoud and moved to an apartment for the rest of the summer. "It was a nice Colorado life while it lasted," he said, noting that his American colleagues with families to support have much more on the line. "I'm lucky enough at 45 to have true freedom." Searching for opportunity For Mike Beaty, a six-year Maxtor employee who lives in Gunbarrel, his June 14 layoff was the second in his career. That last time was 15 years ago, during a sluggish economy. Job hunting is easier now, he said. And that's a good thing. "I've gotta investigate everything these days," said Beaty, the son of Daily Camera administrative assistant Lynn Beaty. "I've got mouths to feed." Internet job postings make it possible to focus on positions needing certain skills. Beaty also started a Web site - www.exmaxtor.com - to help the company's former employees keep in touch and share job leads. The mechanical engineer oversaw a group that ensured quality from 82 of Maxtor's Asian suppliers. He applied for a similar position at Seagate as part of the merger, but didn't get it. He didn't expect to: "I'm in middle management. When they talk about duplication of jobs, that's us." He expresses optimism that he'll find a good job in which he can contribute to a company's success. Three of the six workers in his group already landed new jobs and a fourth enrolled in architecture school, leaving Beaty and one other still searching. His engineering experience beyond hard-drive manufacturing - stints working with consumer, medical, military and water filtration electronics makers - widens the opportunities for which he is qualified, Beaty said. But he's also limited by geography. He needs to stay somewhere on the Front Range while his sons, a high school junior and an eighth-grader, finish school in Boulder. Beaty has interviewed with three prospective employers and constantly networks. Meanwhile, Beaty said, his experience in the industry taught him to put money away so he'd be able to turn a layoff into an opportunity. "I've been saving for a rainy day. And, look, it's raining," he said with a chuckle, shortly before heading to his latest job interview. "I think there's a rainbow at the other end of this ... hopefully with a pot of gold." Contact Camera Business Writer Greg Avery at (303) 473-1307 or averyg@dailycamera.com.