Layoffs: A Company’s Strategy of First Resort

After two decades of placing his brown tool box in the same work station in the same Silicon Valley machine shop, Finn Runge figured that’s where he would retire. He never imagined how wrong he could be.

In the last two years, the tall, clean-cut native of Copenhagen has been laid off over and over, like an auto worker of the ‘80s. He has been pushed out of work by six different firms, seven if he includes the time he left before the employer filed for bankruptcy.

Through it all, Runge has maintained a steely focus on staying employed. He is not desperate, and he does not care to look back. He is also luckier than other Silicon Valley machinists, at least one of whom, Runge knows, is now working as a clerk at Home Depot.

Nonetheless, the odyssey has left Runge, 55, weary and with a tempered view of what he can expect from his employer. “I’m so damn tired of it,” he said on a recent evening. Ten years ago, he says, he believed in a quid pro quo: You work hard and the employer takes care of you, even during tough times.

But today he isn’t sure whether he’ll have a job beyond Christmas. “There’s nothing I can do about it,” said Runge, who has learned that he can count on nothing but his machining skills and his contacts.

Runge’s experience, of course, is hardly unique. Shedding workers has become common practice in corporate America. Even in the once-highflying Silicon Valley, thousands of workers have been cast away since last year, when Asia-related cutbacks by semiconductor chip giant Intel and others spread to chip equipment makers such as Applied Materials and Lam Research. That, in turn, has trickled down to hundreds of smaller shops that service Silicon Valley, including scores of machine shops.

In some ways, younger machinists, like Dave Alvarez of Santa Clara, have accepted the job losses more easily because they had lower expectations to begin with. Alvarez, 31, entered the work force a decade ago when companies nationally were laying off workers left and right. Living in Silicon Valley, Alvarez also knew that high-tech workers come and go like baseball players, all free agents in a way. Yet he still thought the rules in his tradesmen’s world were different from those in the emerald-green office buildings. He now knows they are not. Seniority won’t save him, nor will a union.

“Companies lay off on a dime. It doesn’t matter,” said Alvarez, who now works for Western Precision but renews his contacts frequently just in case.

Contacts are what have kept Runge from standing in the unemployment line. After his first layoff in the summer of 1996, he called up an acquaintance at Liberty Machine, where he secured a job in less than two hours. But that job lasted just four months, and it has become increasingly harder for Runge to find work. Help-wanted ads for machinists once filled three columns in newspapers, but today there are just a handful.

Over the last two years, his shortest job before layoff lasted two months; his longest, seven months. He remembers one layoff in particular. He got called into the office on a weekday morning. Runge thought he might be getting a bonus check for $100 or so, as he had in recent weeks, but instead his two stone-faced supervisors gave him his paycheck and told him to go home. Just as stone-faced, Runge, after that layoff as well as subsequent ones, has packed up his tool box, his potted plant and the other items he typically arranges at his work station and has walked away, saying nothing.

Runge harbors no bitterness, though the experiences have taken a toll on his psyche. He has tried to shake off the residue by getting on his blue Honda motorcycle and zipping along the back roads and down the coast. He takes comfort in the home he owns in Milpitas and the fact that he is nearly finished putting his two children through college.

Even with two layoffs this year, he hopes to pull in an income of $80,000. He says he likes his new job at L&P; Machine in Santa Clara, where he started in July. He works with a computer mouse, programming a machine that mills and grinds everything automatically. And he is trying to keep his skills sharp.

His skills and experience have helped Runge survive a layoff of 15 workers at L&P; just a few weeks after he started there. Since then, his hopes have risen that things may be turning around for machine shops in Silicon Valley. “How long will I work here?” Runge asked. “I really have no idea.” After a pause, he added a bit whimsically, “But maybe, maybe until I retire.”