June 29, 2009

Silicon Valley Shutdowns Mean Quieter Business This Week

The global recession has not spared Silicon Valley, or of course, the state of California, which stares in the face of bankruptcy, forced to grapple with an unprecedented budget shortfall. With a statewide unemployment rate exceeding 11 percent, the nexus for much of the world's tech innovation has been severely strained. The unemployment rate for Santa Clara County stands at 10.8 percent, with San Mateo County looking a bit healthier, at 8.1 percent, according to the U.S. Bureau of Labor Statistics.

In an attempt to reduce fulltime job losses, companies throughout the Valley have turned to every play in the book to reduce costs - stopping and slowing projects, eliminating contractors, reducing pay for both rank and file and executives, forcing vacations, and the ever-popular move of company shutdowns (which we also saw in the 2002-03 recession following the crushing death of the first dot com era).

With Fourth of July looming, this week will see many companies in the Bay Area have their doors closed to non-essential, non-customer support facing employees. Among the known companies shutting down this week are Adobe, Autodesk, NetApp, and a number of other firms, both public and private, who are looking to draw down on company vacation during a time when some employees' thoughts are toward the beach and barbecues.

(See details from Autodesk and one Adobe contractor)

And for those companies that are staying open at a time when their counterparts are sleeping in, there's no doubt many employees are opting to take the week themselves, so you can expect fewer phone calls, reduced Web traffic, and yes, reduced real world traffic as well. So maybe that drive up the peninsula that used to take 45 minutes in morning rush hour just might take 25.

So if you drove into the office today and wondered why you didn't see the usual hustle and bustle, the shutdowns are why. It's a solution that makes the finance guys on one side of the building happy, and possibly the other side of the building isn't complaining much either, with a much-needed respite from the daily grind.

See Also:Know of any other Silicon Valley companies that are taking the week off? Let me know in the comments.