One layoff leads to another

When customers sit beneath an intricate gold mural, order kung pao chicken and confide that they’ve just lost their jobs, waitress Alice Lau understands their hurt and fear. She’s feeling the pinch too, as the repercussions of decisions made by others trickle down to her.

Her hours at the Great Wall Chinese restaurant have been cut because regulars such as Rogelio Valdez can no longer afford dinners out. Some customers come in for one last meal to tell her they’ve been laid off, then disappear.

Valdez, a barber, said business at his shop was down. He no longer sees customers such as Dave Vasquez, who shaved his head to avoid spending money on haircuts.

Vasquez had worked as a nanny for Bill Maxwell. But when Maxwell lost his job with a Pasadena video game company, he was forced to let Vasquez go. The start-up had no money to pay its workers after a major publisher, spooked by signs that the country’s economic troubles were worsening, canceled a contract in August.


As the recession deepens across the country, touching millions of individuals, it links people through countless cutbacks and layoffs. One job loss leads to another, much the way a wobbly domino can topple the whole row.

Minor financial decisions -- a penny pinched here, a dollar saved there -- build, rippling through a chain of strangers.


The loft in Pasadena’s antiques district was funky, with Victorian chandeliers, exposed brick and a bathroom plastered with turquoise tiles. It seemed the perfect space for the video game start-up, WhiteMoon Dreams.


Founders Scott Campbell, 36, and Jay Koottarappallil, 32, moved out of their home offices and into the rented loft in August 2007. Soon after, a major video game publisher agreed to buy the shoot-'em-up game they were developing. The pair hired a dozen people and a handful of contractors. Everything seemed to be coming together.

Then the stock market started its free fall. Publishers grew skittish about spending money. The founders could see calamity coming, like someone anticipating the breakup of a relationship but powerless to do anything about it.

Last summer, a year after agreeing to the sale, they were crushed when the publisher, which they would not name for legal reasons, said it could no longer buy the game and brought in lawyers to unwind the deal.

But the founders didn’t want to give up. They told employees they could stay -- if they didn’t mind working for free. Six remained and have picked up a little work, but nothing yet that could revive the company’s fortunes.

The stress is accumulating as WhiteMoon Dreams prepares to show off the game -- appropriately named Salvation -- at the Game Developers Conference this month. The founders hope to find a buyer for the project or a publisher that will hire the company to write something new.

Campbell and Koottarappallil feel the pressure of coming to work every day and not knowing whether it will be the last, of depending on family and friends and the unemployment office for money to survive, of watching yet another rent deadline or mortgage payment approach, of wondering who among them might decide to call it quits.

“Everything’s on hold,” Campbell said. “It’s a waiting pattern to see how everything shakes out.”

They set a Dec. 31 deadline to shut down the company but couldn’t pull the trigger. They sit, work and wait. But some of their employees and contractors couldn’t do the same.


Bill Maxwell, a writer who created plots and dialogue for the game, had a family to support and needed a salary. His initial contract ran out in June with an understanding he’d start another job for WhiteMoon Dreams in November.

But when the publisher backed out of the video game deal, the company couldn’t afford to hire him again. Without any work on the horizon, Maxwell had to make some changes of his own.

Maxwell and his wife, Nikki, can rattle off a long list of things they’ve done without since he stopped working for WhiteMoon Dreams.

Their kids, ages 9, 6 and 3, are familiar with them too: No more sushi, lattes or Whole Foods groceries. No trips to Disneyland, indoor playgrounds or bowling alleys. No new books or DVDs. No fixing the tub in their second bathroom. No healthcare.

Bill, 41, spends hours sitting in the study of the family’s one-story home in North Hills, searching Craigslist for jobs as leafy trees gently tap on the windows. A child’s drawing taped to the bookshelf says, in shaky writing, “I am thankful for my dad.”

Nikki, 39, was laid off from a job writing grants at a charter school last fall. When money grew tight, she surrendered to friends’ counsel and picked up staples at a food bank in the Valley, although she was more used to donating and volunteering there. She choked up when, in addition to rice, beans and canned vegetables, she was given a sheet cake to share with her children.

Grief and anger have swamped the Maxwells at times, causing them to wonder whether things will ever change. How long can you look for a job without losing hope?

It’s been tough, they say, being consigned to their cluttered home. They have spent days in sweat pants, stepping over crayons, guitars and piles of toys, and having to say no when their son asks for a Popsicle because there’s just not enough money for treats.


“We had to make some hard choices,” Nikki said, tucking a yoga mat into a wicker basket and glancing outside at a child’s bike abandoned in the middle of the yard. “The bottom line is, I still have to feed my family.”

That meant adding one more thing to the do-without list: their good friend and live-in nanny of six years, Dave Vasquez.

On a warm day in January, Vasquez peered in the mirror and saw a carless, cashless vagabond looking back at him. His eyes were bleary from nights of tossing and turning on couches, his skin sallow from eating TV dinners. His hair was scraggly and needed a cut.

Life changed dramatically after the Maxwells laid him off in August. Vasquez began a routine of couch surfing and job hunting, living off food stamps, taking buses around Northridge to look for work, hoping employers wouldn’t mind that he had been arrested once years ago -- for stealing a loaf of bread.

Days meant heading to the employment office or scavenging for cigarette butts that, when combined, might contain enough tobacco for a smoke. Nights, he waited for darkness so he could retreat into the reprieve found only in sleep.

“You just do what you have to do to make sure tomorrow comes,” Vasquez said.

Worst were the days spent in offices waiting for food stamps. He couldn’t help thinking that he didn’t belong, that he was different from the people there.

Each week, more people seemed to show up at the employment office looking for work, and the 36-year-old Vasquez wondered how he could compete. His scattered resume listed jobs at comic-book shops and in construction, as a cooking instructor and a record-store clerk.

So when Vasquez stared in the mirror on that January day, five months after being laid off, he knew he needed to look more professional. He glanced in his wallet and saw that he didn’t have enough cash for a cut from one of the barbers he had frequented in the Valley.

Vasquez then picked up a 10-year-old pair of clippers, pulled off the plastic guards and shaved his head.

Proof of the sputtering economy has crept close to Rogelio Valdez’s storefront on Reseda’s Tampa Avenue. His neighbors’ windows are covered with filthy “now leasing” signs. On the median, posters announce blowout sales at fabric stores and mattress warehouses.

Inside, Valdez’s old-fashioned barbershop looks immune to the passage of time. From two framed paintings, Marilyn Monroe winks at the men sitting in red leather barber chairs so old they have built-in ashtrays. The red, white and blue barber pole rotating outside matches the tinfoil American flags that flutter above the door.

But not even a business offering $12 haircuts is spared the fallout when people such as Vasquez decide to scrimp. Things began to slow in January, Valdez said, and supply costs kept climbing: shampoo and scissors, hair spray and after-shave, trimmers and razor blades. So far this year, business is down 20%.

“The whole world’s cutting back,” he said.

Valdez, 64, now works longer hours -- seven days a week from 9 a.m. to 6:30 p.m., except Sundays, when he closes a little early to visit family in the Valley.

It’s just bad timing, he said, that things started to slow seven months after he and his wife took over Medina’s Barbershop from its previous owner, who had retired.

Valdez has been a barber for 40 years. Now he’s working for himself, just as he had hoped to do as a young boy in Jalisco, Mexico. He decided then to enter the trade because he was told he could cut hair his whole life, even as an old man. He’s glad that he’s able to work extra hours to keep his doors open.

Not that it won’t take some sacrifices, Valdez said as he brushed hair from a customer’s shoulders. No more vacations to Las Vegas. No more unnecessary long car rides when the price of gasoline seems as unpredictable as the traffic patterns on the commute from his home in South-Central Los Angeles. No more dinners out at his favorite restaurant, the Great Wall, a few blocks away.

During the lunch rush, business at the Chinese restaurant is sluggish. Bowls of fried won tons line the counter, uneaten. Blue-and-white dishes are set atop empty tables as if waiting for a party to begin.

When people such as Valdez stopped coming in for meals, Great Wall owner Wilson Chien was determined not to fire any of his 11 staffers. He instead reduced each employee’s hours by one day a week.

For Alice Lau, the $600-a-month pay cut means more years of pouring tea and delivering steaming plates of food.

“I’m getting older, I wanted to retire, but my investments went down a lot,” she said, her short hair showing barely a trace of gray against her uniform of white tuxedo shirt and black bow tie.

Lau, 51, has seen hard times before. She emigrated from Hong Kong at 18 with a fifth-grade education and earned a living sewing in backrooms of tailor shops. She divorced and raised her three children alone. The Chinese restaurant she bought tumbled to the ground during the 1994 Northridge quake as if it were made of twigs.

Her kids are grown now. But one son is a student and her daughter works at a movie theater, so they still live at home, and Lau pays their insurance and cellphone bills. They try to help her with their salaries whenever they can.

“We’re just hanging on,” she said.

She’s lucky though, Lau says as she shuffles between tables, placing a bowl of noodles here, a plate of fried pineapple balls there. She has good kids who “came up well” and a job she loves.

Still, Lau has had to make changes to make ends meet. She eats dumplings at home instead of dim sum in Alhambra. She blow-dries her hair rather than make weekly visits to Kim’s Upper Cut, the salon next door. Her son does the yardwork at their West Hills home; Lau decided she could no longer afford the gardener who came weekly.

The gardener and the hairdresser surely pared their budgets too, adapting to the slowing economy. The ripple effect continues, although those affected may not know how they were swept up in it or where it might end.


Postscript: Vasquez found a job testing video games and rented a room in a house near the Maxwells. The others are still waiting for something to change.