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Anatomy of a Silicon Valley Layoff

New America Media, News feature, Video, Raj Jayadev//Video: Angel Luna Posted: Apr 15, 2009

Her e-mail handle says it all Five_Kids98.

At 48, Doris Rodriguez is a mother of five and a grandmother of four. Throughout the years, in order to provide for them, she has been a fruit picker on the land that became Silicon Valley, an assembly line worker when high-tech manufacturing was in its infancy, and eventually ascended to the position of lab technician supervisor after 23 years at Spansion, the largest Flash memory chip maker in the world.

Rodriguezs long personal employment history is a timeline unto itself of the rise and fall of Silicon Valley as an economic engine. Integral to the story are the workers who fueled the regions growth, despite in the end being betrayed by its promise.

In February, Spansion shed 3,000 employees globally, more than a third of its workforce in a self-described restructuring period. Even during the collapse of the nations financial institutions and housing market crisis, there was a hope among employment analysts that Silicon Valley was somehow insulated from the countrys financial woes because of its global reach.

But now, as unemployment rates hover above 10 percent, that theory is a bust.

Spansion was once thought to be one of those companies immune to the recession given its expansive market. The companys Flash memory chip can be found in nearly every electronic device: in cell phones, cars, networking equipment, high-definition TVs, and other consumer electronics. Nonetheless, Spansion slashed 615 jobs at its Bay Area campuses and plants.

In a company statement John Kispert, Spansion president and CEO, said "the global recession is forcing us to make this very difficult decision in order to bring our costs in line with the current expectations for significantly reduced revenues." Yet at the same time as mass layoffs, the company maintained pay increases to its upper-level management and executives. If AIG was emblematic of Wall Streets demise fueled by its own greed, Spansions controversial layoffs are the symbol in Silicon Valley that greed in the new high-tech economy looks and feels a lot like the old one.

By March 1, Spansion had filed for bankruptcy. And while the company says filing for Chapter 11, shifting market targets, and hiring a chief restructuring officer allows Spansion to strengthen its financial position and focus its business for long-term success, Rodriguez and her former co-workers have to simply start over.

At her daughters home in East San Jose, Rodriguez still is shell-shocked from the layoff, because she expected to spend the rest of her working years at Spansion.

Its like being on a boat, and they tell you its sinking, but dont give you a life jacket, or the chance to find another boat, she said.

She is playing with her granddaughter, bouncing the child on her knees, as she re-imagines herself. I think Id like to be a social worker, or in the medical field, something that helps young families and children, she said. While casting her thoughts to the future, optimistic and hopeful, Rodriguez still cant help but shake her head at the life-jarring layoff that came with no warning, apology or severance after 23 years of work.

Rodriguez began working in the high-tech sector as a teenager, before the area of Santa Clara County took on the name Silicon Valley. Ive spent more than half of my life working in that industry. By 1986, she was working in thin film production, placing layers of glass on top of the wafers, back when Spansion was called Monolithic Memories Incorporated.

I really liked the work, it was fast pace, and after a while it was like I was my own boss, she said.

The work ethic she takes pride in, that carried her through 25 years in a fast changing and physically demanding industry, was bred into her at an early age. As a child I picked prunes and strawberries, and as a teen cut apricots by where the airport is, she said. Ive always worked hard, its all Ive known.

And, as the economy and work changed in Silicon Valley, there was a binding ethic, regardless of if the job was in the fields or in the clean rooms that kept Rodriguez grinding. Those of us from the baby boomer generation were always taught that you have to work hard and sacrifice now, and that the easier times will come when youre older.

In 1997 as the rapid climb of the high-tech industry also raised housing costs in the region, Rodriguez, like many Silicon Valley workers, got priced out of the Valley she was helping to build. She bought a home in Modesto, Calif., a Central Valley town, and commuted over four hours a day round trip to work for Spansion, taking naps at a gas station along the way.

Last year, as the companys financial outlook became less secure, Rodriguez and her co-workers did what they could to keep Spansion running.

We did our part to make sure people didnt get laid off, took pay cuts, did work furloughs, everything we could to help out, she said.

It was during a work furlough that Spansion decided to not bring hundreds of workers at the Sunnyvale branch back. I was at celebrating my granddaughters birthday at Chucky Cheese when my aunt who also works there called and said, check your account, I got some money from Spansion, and I think we just got laid off.

Rodriguez checked her account, and sure enough she had an unexpected check from her employer. I thought is was just a mistake, because I didnt get a call from my boss, and my whole division was supposed to return to work that week, she said.

By the start of the work week, e-mails were flying back and forth among employees, checking who was laid off, who was still just furloughed, and who was back at work. Rodriguez along with her colleagues in the Sun Micron Division got the following e-mail from management:

Dear all:

I have no official confirmation but it almost looks like this may be the end of the line for all of us Looking back, I must say we have had more ups than downs and we transformed ourselves many times over to achieve and deliver what the company needed while showing tremendous personal growth...

The co-workers, what Rodriguez calls her work family got together at Ciceros Pizza for a part-grieving ceremony, part-venting party, and part-strategy session.

We knew we couldnt just let them get away with throwing us away, she said.

They sent up a Yahoo listserv to exchange information on unemployment coverage, job leads, and potlucks. The listserv also informs them about the class action lawsuit they collectively filed against Spansion in federal court.

Ken Sugarman, one of several lawyers representing the former Spansion workers, says Rodriguez and her co-litigators have a very strong case.

Under the Worker Adjustment and Re-Training Act (WARN Act), employers must provide 60 days notice before they conduct a layoff of more then 50 employees at one site, he said.

The law is intended to allow employees to make arrangements or find another lifeboat, as Rodriguez would say. The remedy, at the least, is for companies who do not give adequate warning, to pay wages and benefits for 60 days. Sugarman says his firm has been getting a steady increase of inquiries by Silicon Valley workers on their rights after they are laid off.

Spansion disputes the workers claims.

We are not providing an update on the lawsuit apart from reiterating that we believe we acted within the bounds of the law, said Courtney Brigham, a corporate public relations manager for Spansion. Rodriguez, though, is not waiting for the courts, and has been looking for other jobs and training programs.

In the meantime, in order to keep her house, Rodriguez has depleted her 401K to keep up with payments, has gotten rid of all her credit cards, and has pinched every penny in order to keep her family fed and housed, living off of unemployment, which is a third of her previous income.

Rodriguez has been a regular at the Stanislaus County Community Service Agency, looking into job opportunities. Her next line of work, he said, will most likely be in a field completely different than what she has been doing for over two decades.

But, Silicon Valley has always been a place of invention, making something out of nothing, and Rodriguez has known that for a long time.

Video by Angel Luna

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