Laid-off techies willing to work for nothing
By Jon Swartz
USA Today
SAN FRANCISCO — Laid-off tech worker Henry Fan accepted a job offer last month from a Silicon Valley startup — a rarity in the job-starved tech market.
But it had a catch: Fan, 32, had to work for free.
During the Internet boom, tech startups had to offer big salaries and stock options to recruit workers. Now, amid big layoffs and not much hope of a tech turnaround soon, a growing number of Silicon Valley tech workers are working for free, recruiters and employers say.
"Many unemployed are leaping at the opportunity for any type of work," says Patti Wilson, a career counselor in Silicon Valley. Half of the 1,500 people on her e-mail list — most of whom are in tech — have recently expressed interest in working for free, she says.
The surplus of tech workers could make it tougher for paid employees to get raises and eventually may depress salaries, says Mark Zandi, chief economist of Economy.com.
Some free workers hope to become paid workers when the economy turns — or to cash in on stock options if their companies go public. Others use the time to fill in training gaps.
"The last thing you want to show a prospective employer is a resumé with a two-year gap between jobs," says Neel Kumar, 33.
Laid off in July, the software developer has worked part time for free since October at a startup.
"It gives me a chance to ... increase my knowledge," he says.
Software firm eSelf was deluged with more than 200 resumés in two days last year after it advertised unpaid training for three months. Trainees were given no guarantee of jobs.
SeaBridge Software is trying to lure employees with stock options — but no wages. The 22-person firm hopes to get more venture financing, with which it could pay employees, or eventually go public.
Rob Tribble, 55, a former Netscape executive, now works at a small startup with a handful of others — most working for free.
Grim job prospects offer little choice. Unemployment is way up, and Santa Clara County will have 955,000 jobs this year, down 100,000 from the peak in early 2001.
Zandi says average hourly wage growth for tech workers is at its lowest since the mid-1990s.
"A lot of workers are holding on to paid jobs," he says. "It beats the alternative."
College students and those with little experience in all types of industries have for years worked for free as interns to make good impressions on prospective employers. During the tech boom, though, workers were so sought after that companies such as IBM and Hewlett-Packard hired college students before they graduated.
For some skill sets, they still do, but it is less common, the companies say.
Fan is an experienced software developer. He was laid off this year by Web-hosting firm Exodus Communications. While he works for free, he interviews for paid work.
