A Season of Discontent for Laid-Off ‘Dot-Commers’

Squeezing his muscular frame through a drunken crowd at the Potrero Brewing Co., David Ashby reaches a pool table covered with free “dot-com” tchotchkes and surveys the pile of corporate throwaways.

The 28-year-old, who lost his Web design job in October, unzips a blue duffel bag and begins to fill it.

Last Christmas, he gave his dad new skis, his brother a Sega Dreamcast and his mom a 24-karat gold necklace. This year, he is forced to circle the giveaway pool table with dozens of other Internet workers.

In goes the tie-dyed T-shirt from Oracle for dad, and glitter cream from ChickClick.com for mom. He snaps up WebTV baseball caps, eyeing them for his brother. “It’s either take this stuff or I’ll have nothing to give,” Ashby said with a shrug.

Christmas in the dot-com world has arrived this year not with a jingle but with a spirit-jarring thunk.

Only months ago, corporate America seethed with envy at all the money lavished on the dot-coms and was off-put by workers’ pompous attitude toward the cubicle drones who just didn’t get the revolution.

But the devastating crash of Internet companies and the crescendo of layoffs over the last few months have brought the dot-com world face to face with its first grim winter--a once-unimaginable season of discontent.

“I called my mom last night and asked her to fax me recipes, especially one for peanut butter balls,” said Jeannie Long, a 26-year-old dot-commer who lost her job in October and has yet to find a new one. “I’m making cards and cookies for everyone this year.”

For many of those who gambled on the Internet dream and lost, the holidays have forced them to face their families and swallow their pride. In many ways, these risk-takers are now embarrassed that they were so thoroughly drawn into the outrageous promises of the new economy.

But beneath the penny-pinching, the deepest cut felt by some of the dot-goners is a spiritual one--a loss of youthful idealism and a painful lesson in humility.

A Dream That’s Over

Years from now, when people point to the one moment when the boundless optimism behind the new economy truly died, they may well turn to the holiday season of 2000--a fateful time when Silicon Valley looked under its tree and found only chocolate-chip cookies and free T-shirts.

“I can’t take hearing of others’ success when all of our life went into this dream and it’s over,” said Matt Hagemann, who, with his wife, Tracey, was laid off from Irvine-based Bluetorch in September.

Last year, the Hagemanns launched a pair of Web sites devoted to women in extreme sports. Mutual acquaintances introduced the couple to Bluetorch, a new-media firm backed by the billionaire founders of chip designer Broadcom Corp.

The Hagemanns sold their company to Bluetorch. Within a week, they also sold their Fort Collins, Colo., home for $280,000 and bought a three-bedroom house in Newport Beach for more than a half-million dollars. Their 7-year-old daughter, Hannah, entered a new school.

Tracey, 31, started her new job as senior manager of the female sports group right away. Matt, 41, who left his job of 15 years at the U.S. Environmental Protection Agency, became a marketing manager in May.

Three and a half months later, the couple walked into the office and learned that they were among the more than half of Bluetorch’s employees to be dismissed. Matt landed a position as a geologist at a Huntington Beach environmental firm; Tracey still hasn’t found work.

Now, as they hang ornaments on their tree, the couple are desperately trying to sell their house by the end of the year, when their severance money runs out.

“Thanksgiving was really hard,” Tracey said. “I don’t even want to think about Christmas.”

Getting Back to Basics

For Rich Schwerin, a founding member of the recently defunct TheMan.com in San Francisco, there are just too many parallels between the holiday culture of consumerism and the excess of the dot-com world.

No one on Schwerin’s list is getting presents this year.

Schwerin, who was the fourth person hired at the online men’s magazine and was a top editor on the site, was depicted as a poster child of the Internet boom in a 1999 Time magazine cover story.

“I remember seeing the magazine and thinking, ‘Wow, we are geniuses. We’re going to mint money,’ ” said Schwerin, 32. “Now, all I can think is, ‘Wow, did I do a lot wrong.’ ”

Topping his regrets were the long workweeks, which Schwerin says ate away at his marriage and ultimately led to the couple splitting. In mid-October, Schwerin signed divorce papers.

Two weeks later, TheMan.com ran out of funding and closed its doors, laying off nearly 100 employees.

He could afford some gifts, he said. It’s the thought of splurging that turns his stomach and prevents him from heading to a mall.

“I just want to reassemble my life and get back to basics,” said Schwerin, who is thinking about moving to Guatemala, where he just returned from a vacation.

Schwerin’s tightfisted reaction is being shared by many of the 31,056 Internet workers who have lost their jobs this year as of November. Job cuts and layoffs across all business sectors are piling up this holiday season, hitting everything from the health-care and service industries to the financial sector to the technology realm, according to recruitment firm Challenger Gray & Christmas Inc.

Dot-com workers have been particularly shocked by these cuts, as their employers routinely boasted of having tens of millions of investment dollars stashed away. When the venture capital community stopped feeding the corporations, the businesses started the steady and natural process of winding down.

“I expect things to be bad throughout December because many companies are realizing they’re not going to make it and just giving up,” said John A. Challenger, chief executive of Challenger, Gray & Christmas. “Next month, the companies will evaluate their holiday sales, which are not strong. I expect it’s going to be a brutal January.”

Homemade Gifts Over Gadgets

For those who can manage it, silence has become the easiest way to weather the economic and emotional storm during the holidays. At Thanksgiving, writer Long knew her parents were worried about her financial situation.

They had read the papers and seen the stories playing out in California. All those companies going out of business. Over plates filled with turkey and gravy, they questioned their daughter.

Are you OK, Jeannie? Do you need money?

“I knew things weren’t good, but I couldn’t admit it,” said Long, 26. “It was humiliating, so I told them everything was fine.”

Days later, the company she was freelancing for--Los Angeles-based IFuse.com--folded, owing her $2,200, she said. A visit to small-claims court yielded nothing.

She had other jobs on the side, some for Web sites that had also shut down. Yet she was counting on the IFuse money to last her through the holidays and the end of the year.

She had no choice now but to tell her family. At least she wasn’t alone, she reasoned. Nearly all of her friends have been laid off.

This Christmas she is thinking of giving peanut butter balls, in part because they require fewer, and cheaper, ingredients than chocolate-chip cookies.

It’s a thoughtful gift, one that could even seem extravagant in a world where everyone works 14-hour days. But the truth is far more basic: She has only $300 to her name and growing credit card debt.

Amid all the fear and loathing, there also is a pervading resilience among those who have been downsized by the new economy. The industry may be smaller, but this is their field of training and expertise. Budgets are tighter, companies are savvier, yet the freebies still exist.

You just need to know where to look and, like David Ashby, be able to ignore the shame.

Ashby knows his parents won’t care about the strange gifts they’ll receive this year. They love him no matter what, he reasons.

His girlfriend, on the other hand, could get peeved.

Picking up another shirt, Ashby notices a large yellow beer stain covering the white neckline. He studies it for a moment, a grimace darkening his blue eyes and pale face.

Has it really reached the point where he must give soiled garments from failing Internet ventures to his loved ones?

He stuffs the garment into his bag and moves to the next open spot on the tchotchkes table.