By Pablo Fuchs
Nothing is more indicative of an arriving recession than layoffs.
People are let go and jobs are terminated because companies’ profits no longer match projected earnings.
The heart of this city’s economy is the high-tech sector — the very same market that has started stumbling.
Local companies such as Nortel and JDS Uniphase are laying off thousands of people because they failed to match projected earnings, while their stock value continues to fall.
Since the beginning of the year, Nortel has laid off about 2,000 workers and JDS close to 700.
The sudden economic slowdown in the city’s most productive sector, along with fears of a recession, are creating the first actual sign that troubled times could lie ahead.
If people lose their jobs, they will not spend money on unnecessary goods and services. And if people don’t spend, then businesses lose money, putting more people out of work, thus creating a vicious cycle.
But instead of rising fears among laid off workers, most are not even worrying. Why? Simply because Ottawa’s high-tech market includes many start-up companies that are in dire need of experienced workers.
Coast Software on Gloucester Street is one of these start-ups looking for experienced workers. The company, which only has 25 employees, says it will benefit from the flux of high quality workers now available in the job market.
The layoffs at Nortel and JDS give the smaller companies a better pool to pick from. Web designers and developers, marketers, and engineers will bring the skills and experience needed for the start-ups to flourish.
This means their experience could be very beneficial to start-ups that require people who have knowledge in developing a business.
For example, a marketer that worked at Nortel could use the experience learned at that giant to help small companies get their products out there.
Still, high-tech workers in this city have little to worry about. Last year, during he height of the surging economic times, 22,000 high-tech jobs were created in Ottawa alone. Even if that figure is cut in half there will still be plenty of jobs to be had.
But there is a fly in the ointment. Line workers who construct products for high-tech giants like Nortel and JDS may have a hard time finding work because their skills will not be needed for most start-ups, which base their businesses on providing services, not manufactured products.
In essence, while there aren’t many, these layoffs are newsworthy and important to Ottawa’s high-tech scene.
There will be some, like the line workers, that will have trouble finding jobs, but others will thrive in these conditions. Being laid off from Nortel could be the best thing to happen to someone’s career: The worker can take that experience and then help local start-ups succeed, thus avoiding a local recession and helping Ottawa’s high-tech sector thrive for years to come.