Friday, March 11, 2005


Would the last one out of Nortel please turn off the lights.

What do white collar workers, brain workers as Kropotkin called them, have in common with blue collar workers, well they are both workers. Regardless of job descriptions or titles, or share offerings or pension plans, or if they drink beer or latte's, those that work in the IT or High Tech industries have faced the came contradictions of capitalism's boom and bust that manufacturing workers have faced. Those that have professional degrees, from univeristies, forget that tradesmen are also professionals, whose degrees come from post secondary institutions as well. The Scientist or Engineer is no different than any other skilled tradesman.

Those who work in skilled and semi-skilled industries are no different than those working in code, software, game design, web work, engineering or automation design. When it comes to the bottom line they are workers and they are expendable as our contuing coverage of the Nortel saga shows. The impact of the Nortel layoffs of thousands of workers over the last five years has directly impacted on Canada's declining productivity as has the thousands of jobs cut in manufacturing.

As the Ottawa Citizen reports the story of the Nortel workers and their working lives is a story that couild be told by laid off auto workers, or even Wal-Mart workers, public sector workers, liqour store workers, etc. Work is work, regardless of the pay or perks. And you either own the means of production or you don't. If you don't you are a wage slave who works for a living. The chains of capitalism bind all workers together, regardless of the collars.

"When the employer pays the engineer twenty times more than the workman, he makes this very simple calculation: if an engineer can save him £4,000 a year in cost of production, he will pay him £800 a year to do it. And if he sees a foreman is a clever sweater and can save him £400 in handicraft, he at once offers him £80 or £90 a year. He expends £100 where he counts upon gaining £1,000; that is the essence of the capitalist system. And the like holds good of the differences in various trades.

Where then is the sense of talking of the cost of production of labor force, and saying that a student who passes a merry youth at the University, has a right to ten times higher wages than the son of a miner who has pined in a pit since he was eleven? Or that a weaver has a right to wages three or four times higher than those of an agricultural laborer? The expenditure needed to produce a weaver is not four times as great as the necessary cost of producing a field worker. The weaver simply benefits by the advantageous position which industry enjoys in Europe as compared with parts of the world where at present there is no industrial development."

Peter Kropotkin, The Wages System

The storyfrom the Ottawa Citizen, which is now a subscriber based news service, may 'disappear' becoming a story for paying customers only. In order to avoid this I have reproduced this very long feature here. As it ties into our story Nortel; Canada's Enron.

Safe landings:
Ottawa's tech workers were soaring five years ago,
but tens of thousands have since fallen to earth,
struggling to find work

Peter Hum
The Ottawa Citizen

Thursday, March 10, 2005

Some of the happiest messages in Jim McQuaid's e-mail box arrive with the subject line: "I've landed." In the past few years, he's received hundreds of them, from different senders, some of whom he barely knows.

They may be strangers, but McQuaid and his e-mailers share a common plight. The downturn derailed their tech careers, and they sought support at the Kanata Kareer Group. "I've landed" e-mails were the messages that everyone wanted to send -- the subject line was code for "I've found a job."

McQuaid, an ex-Nortel Networks employee and leader among the volunteer forces that support Ottawa's out-of-work techies, likes the metaphor.

"The analogy is of a parachute, forever in descent mode," he says, "passing opportunities such as job postings and interviews, and dodging things like family matters, financial problems, emotional distress -- but not able to grasp onto anything meaningful.

"'I've landed' means the person has come to a place where they are no longer looking -- floating -- for work. It's the ultimate 'I made it alive' e-mail."

It's easy to keep extending the analogy. After the Internet revolution of the 1990s, techies were indeed soaring into the new millennium, borne aloft by hopes for a golden telecommunications age. By the Nasdaq's measure, many of their companies were flying highest five years ago today, when the stock quotation system's index shattered its records on March 10, 2000. Tech businesses were flying business-class -- that is, until the bubble burst, and it was time for tens of thousands to pull the rip cords.

In Ottawa, according to Statistics Canada, tech employment peaked in May 2000 at 72,400. Untold layoffs since have forced that number to drop. It stood at 45,600 earlier this year, for a net loss of nearly 27,000 jobs. That's a lot of parachutists.

More often than not, they had been doing challenging, creative work that they loved, working in excellent teams for good and sometimes great remuneration. Some, like McQuaid, put in decades for Nortel or another employer before a devastating tap on the shoulder came.

When the downturn took away their jobs and scorched their prospects of new employment, they developed far different routines from the long hours they were accustomed to logging at their offices.

Those with substantial savings or connections to funding, as well as entrepreneurial spirit, began their own companies -- technology-oriented or otherwise. Many of Ottawa's startups are phoenixes rising from the ranks of Nortel's cast-offs.

Others fired countless resumes into the void, even as the sector that had employed them shriveled, with companies large and small failing. They lived more frugally and racked up credit.

Many dug into retirement funds to survive. When tech jobs eluded them, they joined self-help groups. They became consultants or carpenters, coffee shop employees or chess teachers. Or stay-at-home parents.

The last five years, a wild ride from boom to bust that only now shows glimmers of recovery, have been harrowing for some, transformative for many, and testing for all. Now is a good time for those who have landed, and those still floating, to look back.

The layoffs at Nortel four years ago affected executives as well as rank-and-file workers, as entire units and projects were axed. Many executives and their staff quickly caught startup fever.

Among them were 13 Nortel engineers who formed Seaway Networks in January 2001 after discovering their project was about to be cut. The engineers quit to pursue the project, and Nortel gave up intellectual property rights to their work in exchange for equity in Seaway.

Natural Convergence was created in April 2001, three days after its founders David Cork and Mark Murray, Nortel eXtremeVoice unit executives, lost their jobs. They put $250,000 into their startup, a voice-over-Internet-Protocol software play, before landing venture funding.

The founders of Trigence, a server application company, took their Nortel buyouts in 2001.

"We were all 100-per-cent career Nortel people," says Brian Hurley, CEO and co-founder of the high-performance server startup Liquid Computing, and another ex-Nortel executive. "We had many opportunities during the years to leave Nortel, and we had consciously decided to stay with Nortel and make it a full-time, life-time career."

Other jobless techies have lit out on their own with fledgling businesses.

Peter Szmyt worked at a succession of software companies -- Simware, Jetform, AIT and finally Eftia OSS Solutions -- before being laid off in May 2002. During his job search, he was frustrated by having to visit website after website, looking for job postings. He looked for a service that collected fresh job notices from comapny websites. "I didn't find one. So I made one," says Szmyt, 39.

In September, he started his free e-mail list, Peter's New Jobs. In May 2003, he began charging. Now, more than 1,200 people looking for work in Ottawa and Toronto subscribe to He plans to expand his coverage to other cities.

After Linda Pond lost her sales and marketing job at Plaintree Systems, she started her company, Customer Connects, meant to assist startups network and reach customers and suppliers. "Things are going in the right direction," she says. "I need to put my full energy into this."

DOT-COM Memories

No one needs to tell Rob Woodbridge how much energy running a business requires. Five years ago, he was the president of GetHOW, a Byward Market startup that made digital, downloadable how-to videos for manufacturers and retailers. Now, at 34, he's on the other side, running the Ottawa Capital Network for the Ottawa Centre for Research and Innovation, a middleman between entrepreneurs and investors.

GetHOW was formed in the fall of 1999 and its founders recruited Woodbridge, already an Internet business veteran.

Woodbridge fondly recalls the days of dot-com mania. "It was buoyant, joyous. It was the funnest time to be an entrepreneur. It was the most ridiculous time. It was absolutely exuberant, energizing," he says.
In February 2000, he attended an Internet startup bootcamp in California, thrown by, the famed, self-styled investment fund for new-economy startups. "It was a drastically different time. People would tell stories about financing. It was like a religious revival. I get embarrassed thinking about it," Woodbridge says.

As 2001, progressed, everything changed. "I remember meeting with an angel investor on the morning the TSX plummeted 800 points," he says. Potential investors submitted increasingly onerous term sheets, demanding returns of three times their investment before anyone else was paid, and more clout on GetHOW's board.

After Sept. 11, critical funding dried up, and Woodbridge shut down GetHOW. "I woke up one morning and said to my wife, 'For the very first time, I have no work.'"

The backlash against dot-coms was profound. WhileWoodbridge's resume once proudly noted that he had been a dot-com CEO, he soon thought better, deciding to bury the detail. "Nobody would want to take a risk on an entrepreneur. It was like being an entrepreneur was a disease, and they didn't want that liability."

He worked at Systemscope as an e-business strategist in 2002 until the job at OCRI came his way. "I'm working with the people in the investment community that slammed the door in my face when I was asking for money. Now that I'm on the other side, I can understand why, and what was wrong with GetHOW," he says.

"Guys like me -- those who survived it -- will be much better suited, much better business owners than if we had not gone through it."

In his basement, he still has mementos of those dot-com days -- paperwork, master copies of products, mousepads and t-shirts and stickers for cars. "My wife always asks me when I'm going to throw it out. I just can't let it go," he says.

There are other GetHOW remnants too -- outstanding bills, loans and legal fees. Still, he may yet run a business again. "Ultimately, I think I am an entrepreneur," he says. "For now, I'm still employed. I might go back to being self-employed."

Tough for Consultants

Most laid-off techies who are self-employed have likely been reborn as consultants. They have not had it easy.

Al Quirt has been a consultant since June 2001, after Nortel cancelled its Optera Packet Core project and the jobs that went with it. "I was quite bitter for a time. I think I pretty much got over that," Quirt says.

Quirt, who is in his 60s, was eligible for early retirement and a decent pension. But his job search was fruitless. "I've found that your resume doesn't show 70 hours a week of coding for the last three years, that you're not getting hired," Quirt says.

Consulting has so far yielded meagre returns. He contributed sweat equity to several startups, but they folded without paying anyone. He has only seen revenue come in the last three months. Quirt may turn to technical writing, helping small companies improve their user manuals.

Natasha D'Souza is trying to balance tech consulting with motherhood.
Five months' pregnant when her contract work at Infineon ended in January 2003, she began looking for work before the year ended, when her son, Aquila, was about six months old. She looked for a year. "The market was dead," says D'Souza, who previously worked at Newbridge Networks and Neutronics Components.

After some "soul-searching," she has recast herself as a consultant, hoping to help tech firms with sales, marketing and project management -- sometimes with Aquila in tow. She meets clients on the one day a week Aquila is in daycare. But he has attended meetings with his mother, in between playtime, meals and quiet time.

"I have to juggle 100 different balls at the same time," D'Souza says. Fortunately, she has full support from her husband, Denis Rheault, a hardware designer at Alcatel who kept his job throughout the bust.

But D'Souza adds: "I can't go full-speed ahead because baby No. 2 is due in May."

McQuaid's Landing

Consultant Jim McQuaid was able to send his "I've landed" e-mail last month, but only after considerable hardship and struggle. He was a 26-year veteran at Nortel when he was first laid off in December 1999. "I was devastated. My world as I knew it came to an end. I fully expected to be there when I retired," McQuaid says. He didn't know then that he would be laid off three more times in the next five years.

The buoyant tech economy of 1999 meant that McQuaid was not out of work long. Within a few days, he found work at CrossKeys Systems, and expected to be with the company for a long time, but his job ended a year later. He remembers telling his spouse: "In the next 10 years, I'll probably work at 10 companies."

He was jobless for four months before 10 months of consulting for Certen/Bell. After four more months out of work, he joined Nuvo Network Management for three months as a service manager before being laid off yet again.

No wonder he and his peers have "retired the words 'permanent job.' That concept doesn't exist anymore. When a company's profits drop, they'll let people go almost at the drop of a hat," McQuaid says.

The Kanata Kareer Group and Ottawa Talent Initiative, two resources for out-of-work techies, kept him busy and happy as he spent half of 2003 and all of 2004 out of work. "Networking encourages you to be up. You're meeting people every day. You're shaking hands. You're among your peers."

He looked into starting a small business, perhaps an Internet cafe. "I came really close to giving up on tech," McQuaid says. "But I needed to be in a tech environment." He was unemployed for nearly two years before he won a 22-week Nortel contract earlier this year.

McQuaid survived by extending his credit and selling off RRSPs. Without his Nortel contract, he would have looked into selling his house and other assets.

"I know some who have lost everything, sometimes lost their families," he says. "Most people are living on savings, living on RRSPs. Their retirements are going to be a lot different than what they imagined it would be."
His Nortel bosses have told him: "'This is forever. You could die here,'" he says. He pauses and laughs: "I hope they meant a while from now."

Enjoy the Day

For McQuaid, tenacity has been crucial. It has served Miladin Djerkovic well too -- he began working again last month at JDS Uniphase, his former employer, after 2 1/2 years looking for work.

Djerkovic came to Canada from Yugoslavia in 1994 as a refugee, fleeing civil unrest. Trained in mechanical engineering at the University of Belgrade, and with three years of experience in his homeland, he looked down at Ottawa from the plane and had a bad feeling about his job prospects.

"I didn't see any factory chimneys. Where there are polluted environments, this is where mechanical engineers thrive," he says -- only half-joking.

He and his wife Jovanka, also a mechanical engineer, were also confronted with a more immediate hurdle before they could find work. They had to learn English. They attended ESL classes and made friends in Ottawa. Djerkovic, a passionate, master-strength chess enthusiast, played in tournaments in Ottawa, Montreal and Toronto.

In June 1997, Djerkovic joined JDS Uniphase, where, among other tasks, he designed packaging for fibre-optic devices and tools and devices for product lines.

During his five years at JDS, his personal life was filled with milestones. In 1998, he and his wife became Canadian citizens. That year, his chess ranking peaked. Among thousands of registered chessplayers, Djerkovic was ranked 21st in Canada. Two years later, in the fall of 2000, he and his wife bought a house. A month later, Jovanka gave birth to their son, Bogdan.

After surviving cut after cut, Djerkovic lost his job in August 2002.

"All of sudden, you have nothing to do," he says. His wife, who had found retail work in 2001, brought home paycheques while Djerkovic stayed home with their son. "You take a deep breath and you learn to cope," he says. "After the first two months, I accepted it as a new reality."

He sent hundreds of resumes, cared for Bogdan, and made a bit of money by giving chess lessons privately and in schools.

This year, he was one of more than 140 people applying for a six-month position at JDS. But this time, he had an edge. "The people that worked there knew me," he says. "The job description exactly matched what I was doing before."

At the interview, concerns arose that Djerkovic would be rusty after 2 1/2 years out of work. He replied that his memory was still very good -- for example, he was able to remember six chess games simultaneously "blindfolded," keeping track of every move on all the boards in his head. He told them of an exhibition that he gave, winning five of six games -- and he was hired.

"Chess came to the rescue!" Djerkovic says.

His first week back at JDS, Djerkovic was plagued with insomnia each night, caught up with the excitement of working again. "The second time," he says, "I really get to appreciate it. I have this special little willingness to do my best."
He doesn't know what he will be doing seven months from now.

"I have no clue," he says. "I enjoy the moment, enjoy the day.

"Maybe that's the wrong attitude, but it helped me go through those 2 1/2 years without a job."

Renouncing Tech

Other tech workers could not stick out the tech job search.

They include Jana Chytilova, an Ottawa freelance photographer who took many of the pictures for this article. Before making her hobby her profession, she spent 15 years at Bell Northern Research and then Nortel.

"It was a hell of a transition," she jokes. "Anything that's a non-high-tech salary is a hell of a transition."

Fresh from engineering studies at Queen's University, Chytilova started at BNR as a power converter designer. She moved into training and organizational development, and then to process development at Nortel.

Five years ago, Nortel rewarded her performance with a free five-day cruise out of Florida and into Mexico. Six months after, she was laid off. "I remember sitting in the exit interview, just totally stunned."

She tried for a year to find tech work -- "not even a nibble," she says. Soon, the photography enthusiast was freelancing her pictures to newspapers.

Her tech past recedes in her memory. "I have my stuff on Workopolis, but I haven't updated it in a couple of years. I don't want to be hitting my head against a brick wall."

She misses the steady pay, benefits and good working conditions at Nortel, but not the stress. If someone were to offer her a tech job tomorrow, she's not sure she would take it. "The longer you're away from it, the less you miss it," she says.

"There's such a bitter aftertaste, with everything that happened financially," she adds. "I'm still as mad today as I was when I was laid off, at how they drove the company into the ground, and they did it at the cost of the employees."

Bogdan Buziak made a similar switch from software developer to carpenter.

In May 2000, after earning his computer science degree from Algonquin College, he joined Zucotto Wireless, a promising downtown startup that developed Java IP cores for cellphones.

"I liked the company and the atmosphere. It was a pretty exciting place," he says. But he adds: "People worked too much... to the point it was kind of trendy to be called a workaholic."

He was laid off in late 2001 -- to his surprise. While Buziak collected employment insurance, he looked, fruitlessly, for tech work. A mountain-lover, he moved to Canmore, Alta., nestled in the Rockies. There, after working as a carpenter for a few months, he put tech behind him. "I realized I was much happier doing that than what I was doing at Zucotto," he says.

Carpentry is in his blood. His father is a carpenter. He worked at carpentry while growing up in Poland, and during summers in Canada. Now, he has three employees.

He says his tech detour was not a waste of time. "It was a good experience... that helped me establish my own business."

But he adds: "It also taught me not to be loyal to a corporation - the minute things go bad, the corporation is not loyal to you."

Coffee Breaks

Some of Ottawa's premier coffee shops owe their success to ex-techies.

Francesco's Coffee Company, in Westboro, is run by former software developer Pietro Camino, 34. In June 2000, Camino went to work as a test verification engineer at Silicon Access Networks, an Ottawa network processor company which after raising more than $120 million U.S. ranked among Ottawa's top three startups.

"I thought to himself, I should be in this emerging market segment," Camino remembers. "There was a belief in the information superhighway coming to rescue us and create unequalled wealth. Like most people, I thought it was the place to be."

Camino's first six months at Silicon Access were "magical." His salary had jumped $30,000 from his last job. "Everybody at the company was visiting Audi dealerships, everybody was buying houses," he says. Pampered with "out-of-this world" perks, Camino "thought this was the new age of employee-employer relations."

After a while, the perks were cut. So too were staff -- once, twice. Salaries were slashed by 10 per cent. Camino was laid off in June 2002. Silicon Access eventually died. "You would never dream that your company would run out of money. It boggles my mind," he says.

Jobless, Camino took the summer off and went sailing each day. He babysat his parents' Kanata home. Then, he sunk $90,000 of savings and inheritance into opening a coffee company modelled after his grandfather's business in Italy. "I had to find something I could stand to do," he kids. "A good, relaxing, low-stress thing to do. Roast coffee, bag coffee, run a little coffee shop."

Since his April 2003 opening, Camino has hired 10 employees and seen his revenues quadruple. "I was meant to do business. I'm having the time of my life." Being laid off was "a good excuse to get started," he says.

Still, he can't quite get Silicon Access out of his mind. "With the $90,000 out of pocket I invested (in Francesco's), we probably had higher revenues than Silicon Access had with $128 million U.S. (in invested capital). What would I do with $128 million U.S.? We would be a multinational. We would be making money hand over foot."

One of Camino's employees is Tim Dudley, a veteran of Nortel and Cognos. As Camino's director of sales, Dudley "single-handedly built up the wholesale side of the company," his boss says.

"I knew nothing formally about sales, but I persuaded a lot of people to throw money at a lot of things when I was at Nortel," says Dudley, 63. Trained in computer science in the United States, he moved to Ottawa in 1970 to work for BNR. Between 1974 and 2001, he spent 17 years at Nortel and a decade at Cognos.

At Nortel in the late 1990s, Dudley, a user-interaction specialist, was at odds with the go-go company culture. "I was very conscious about not working overtime. I wanted to keep in touch with my family. I hadn't completely sold out. This is not my life. This is what I'm doing to support my life."
Laid off just before Christmas in 2000, he exhausted his severance package for a year and then looked for work. Two years passed, and he was still jobless. He went through almost all of his RRSPs.

Dudley lives near Francesco's, and was impressed with the coffee. He and Camino hit it off, and Camino put him to work in the fall of 2003. "I kind of thought, 'This guy could sell, eh?'" Camino says.

"After three years of not getting any work, I basically re-invented myself," Dudley says. "My strength is people, I'm honest, and I really like the product. I'm selling it because I think they should taste it and enjoy it.

"High-tech stuff is very very cold, very left brain, very isolated," he adds. "Instead of encouraging people to cocoon and avoid human interaction, I really enjoy the idea of encouraging people to socialize."

Another convert from tech to coffee is Trevor May, 40.

He joined Zucotto Wireless in August 2000, when it was on the upswing, en route to becoming a 160-employee company. Like Buziak, he enjoyed his job, but grew concerned about Zucotto's sustainability. An alumnus of two other startups, he estimated that Zucotto's optimal revenues would still fall far short of what it needed. "It was an order of magnitude off. It was 10 times off," he says.

May quit in the summer of 2002. "It finally had become just a job. I wasn't interested in anything that was just a job," he says. Zucotto folded the following spring.

Disillusioned with tech after 15 years in the field, May returned to school, earning an executive MBA degree at Queen's University. "I thought if I'm really going to be a success, I should do it in a disciplined, structured way."

He also began building and selling high-end guitar amplifiers to discriminating musicians like himself.

As the operations support manager at Bridgehead, May finds his work varied and exciting. He's negotiating leases for new sites and planning growth. On the tech side, he built an online ordering system that saves three days of accounting every month. He'll be wielding a hammer when the next Bridgehead shop is built.

"I don't miss it (tech) at all," May says.
© The Ottawa Citizen 2005

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