Tech slowdown claims more LV companies, workers edgy

Kevin Ferguson

Thursday, April 19, 2001 | 11:35 a.m.

The slowdown in the formerly red-hot technology industry has left many Las Vegas tech workers edgy about their jobs or their job prospects.

Those who haven't been laid off during the downsizing of many of these companies are feeling insecure about the future of their jobs in today's volatile and slowing economy, say industry observers.

"A lot of information technology managers are nervous. They're wondering, 'Is my job going to be affected'," said Jet Mitchell, a technology recruiter for the Las Vegas division of RHI Consulting.

When gaming and utility companies, for example, put a hiring freeze on their information technology departments, it makes the department managers wonder if the downsizing will even lead to them, she said.

And it's not just the techies feeling the effects. Real estate companies and consultants are losing money when executives of struggling dot-coms pack up and desert their offices late at night or on weekends, escaping with allegedly unpaid bills.

One example of that is Iswag.com, a Henderson company that was leasing office space from Macdonald Properties near Green Valley Parkway north of Sunset Road. At one point the company employed about 30 people -- they all apparently lost their Iswag jobs. The company served the promotional products industry.

"My impression was they were doing all right ... paying their (lease) on time. Then, suddenly they were gone," property owner Rich Macdonald said. "It was really surprising that they had cleared out."

The attitude among techies has taken a 180 degree turn. A year ago, they were demanding stock options, extra vacation time and high salaries. But not these days.

"People are looking to go wherever they can go. They're not being choosy," said Dennis Sullivan, Las Vegas branch manager of recruiting firm Eastridge Infotech. "They're saying, 'Dennis, find me something, anything.' "

The biggest effect on local techies and support staff came from Preference Technologies and Lowestfare.com, which collectively put nearly 400 Southern Nevadans on the job hunt in the past 10 months.

Preference Technologies, which was trying to develop a customizable news and information site, drained its finances before it could bring the product to market.

The company eventually merged with Newport Beach, Calif.-based USAutoNews.com after Preference had fired 95 percent of its 200-plus workers. After the January merger, Preference's remaining nine workers got axed.

The future of Lowestfare, an online travel wholesaler owned by billionaire Carl Icahn, is uncertain, analysts say, after Icahn's failed attempt to acquire TWA. American Airlines, which bought TWA in bankruptcy court, has cancelled Lowestfare's lucrative ticket buying and selling contract with TWA, draining a huge portion of Lowestfare's ticket inventory.

Other dot-coms to close or cut staff in Las Vegas in the past year include:

marchFIRST filed for bankruptcy protection from its creditors earlier this month. Tim Stanley, the former managing partner of the Las Vegas office, recently was hired by Harrah's Entertainment.

Many of these companies, which were funded by private investors or venture capitalists, had lofty goals.

But the economy was sent into a tailspin when the Federal Reserve started hiking interest rates in order to contain inflation.

The slowdown and resulting weakness in the stock market caused funding to evaporate quickly for dot-coms that showed hardly any sign of future profitability.

21st Century Financial Services System, a year-old Las Vegas start-up, has taken advantage of the death of several local companies for recruiting.

"From a lot of these shops closing in town and making people look for jobs, it has changed the environment of employees being in the driver's seat. (Now) it's an even playing-field," said Mike Accardi, the company's chief technology officer.

21st Century Financial, which has a staff of 142, has just launched its first product, which allows businesses to consolidate their financial services online -- from getting mortgages approved to insurance papers completed to utilities hooked up.

The slowdown in technology has made it challenging for tech students at the Community College of Sourthern Nevada to find jobs.

"I counsel my students to get prepared now and get the academics out of the way, because things will turn around," said Tom Lisa, a CCSN technology professor.

The CCSN program, which trains students in certification of Cisco Networking, fiber optics, telecommunications and PC trouble-shooting, has grown to about 1,200 students in the past two years.

Warren Hioki, CCSN associate dean of engineering technology, said most of its students get jobs through doing internships with companies like Sprint, Cox Communications, Bechtel Nevada and the Federal Aviation Administration.

"Most jobs go to the people who are compatible in the workforce, not so much the one's who get the best grades," Hioki said. "Most companies we've spoken to say the personality factor is the number one issue."

Market conditions has made it challenging for Getthere.com, another travel company, to grow at last year's expectations, said Brian Ashton, a Getthere.com vice president.

Ashton was general manager of Henderson-based Allmeetings.com prior to his company being acquired by Menlo Park, Calif.-based Getthere in a $25 million deal.

"We're not growing at the rate we were hoping, but since becoming part of Getthere, we're able merge some of our resources," said Ashton, whose local division of Getthere has about 40 employees.

A few months after Getthere's April 2000 acquisition of Allmeeetings, the Menlo Park-based company was acquired by Sabre Holdings Corp., a Dallas-based travel service company, for $57 million.

Despite the slowdown in tech hiring in Las Vegas, some local companies besides 21st Century are expanding.

For example, Travelscape.com, a travel wholesaler owned by Microsoft-backed Expedia Inc., just moved into a new three-story building in Summerlin to accomodate its 300-plus staff. That's an increase of about 100 in the past year.

But of the expanding companies, some are still having difficulty finding qualified people locally.

helloNetwork, a Las Vegas-based streaming media company with about 150 employees, has struggled to recruit in Las Vegas.

"We try to recruit locally when possible, but the people we need are java programmers, which largely come out of California or other countries," helloNetwork.com spokesman Jeff Hein, said.

Kevin Ferguson

is a business writer for the Sun. He can be reached at (702) 259-4077 or by e-mail at kevinf@lasvegassun.com