Silicon Valley quiet as forced holiday underway

Andrea Orr

PALO ALTO: Traffic is light, parking lots are half empty and hallways are dim

throughout office parks in Silicon Valley this week, where many companies have

put workers on a mandatory vacation to save money.

For the second year running, the high-technology industry has shifted into

low gear at the peak of summer, turning the US Independence Day holiday on July

4 into a week-long break from work as companies come to grips with a stubborn

downturn.

Some of the region's biggest employers, including Hewlett-Packard Co., Sun

Microsystems Inc. and SGI have shut their offices for the week or staffed only a

skeleton crew. "It's a relatively painless way to avoid more drastic cost

savings measures," said a spokeswoman for software maker Interwoven Inc.

"Nobody seems to mind."

Like Interwoven, most companies enforcing a mandatory holiday this week are

paying workers for their time off, but say the money saved on things like

building operations needed to maintain a full staff adds up.

Software maker Adobe Systems Inc., calculated savings of between $3 million

and $4 million when it shut all its North American operations for a week last

July. This year, the company has again asked some 3,000 North American employees

to take a long break.

In addition to cutting corners on building maintenance and operations,

companies also book a kind of savings by removing accrued vacation time from

their books. "It seems to be very popular with the staff," said a

spokesman for Adobe. Not all high-tech staffers are included in the extended

celebration, however.

Breaks and errands for those remaining



David Wu, an analyst who follows the semiconductor industry for Wedbush
Morgan Securities, said many of the companies in his sector, such as chip

equipment maker Applied Materials Inc. are up and running this week, which he

takes to be a sign that business is in the upswing.

"Last year business was so bad that some chip companies closed for July

4th, and Thanksgiving and Christmas. They closed every chance they got,"

said Wu. "Last year was such a disastrous year, you don't want to remember

it. This year not as many (chip) companies are shutting down."

If a few extra days off around the holidays does not seem like much, it

signals a transformation here in the capital of high-technology, where employees

have traditionally been better known for their workaholic ways than their love

of summertime barbecues.

Two summers ago, when technology stocks were still near peak levels and

hundreds of young start-up companies still expected to go public, many workers

worked straight through the holidays, keeping their gaze on critical new product

release deadlines and possible stocks option riches. Now, many are all a lot

mellower.

Many of those people who did have to go to work this week reported that not

much work was getting done. Instead, staffers whiled away the days talking at

the water cooler or taking extended smoking breaks.

"I was surprised by how many people who were out running errands,"

said Nate Tyler, public relations manager for the Internet search engine Google,

based in Mountain View, Calif. Google, one of the few Internet companies whose

business is thriving, maintained normal operations this week - but its workers

did at least get a break on the commute.

Tyler said his usual one hour plus drive from San Francisco took just 40

minutes on Tuesday. "Lighter traffic is always a good thing," he said.

(C) Reuters Limited.