The headlines in recent months have been as stinging as this
bayou city's mosquito population. Compaq to cut 8,000 jobs in merger
with Hewlett-Packard. Continental lays off 12,000 employees after
terrorist attacks. Enron declares bankruptcy, leaves 4,000 people
out of work.
It's enough to make most Houstonians - even given their legendary
bravado - shudder, as reminiscent as it is of the "Great Downturn"
of the mid-1980s. At the time, Houston - fully 86 percent dependent
on oil - fell into the worst recession since the Great Depression.
After that debacle, the city diversified its economy. The only
trouble is, it now acts much like the rest of the country - which
means when the US goes into recession, as it is now, so does
"One of the hallmarks of this recession is that it is fairly
uniform across the country, even in parts of the Southwest like
Houston," says Steve Cochrane, senior economist at Economy.com in
West Chester, Pa.
He says Houston used to "always come out smelling like a rose"
during national recessions, because it was able to ride them out on
the high price of oil.
That was one of the main reasons Trupti Sheetal and Ganesh
Hariharan came to Houston from India in the first place.
Both on H1 visas, they knew (or thought they knew) that energy
was a safe industry during a recession, an industry that could
weather a downturn while they worked on getting their green cards.
They were two of the fortunate few to get hired on at Enron right
out of college. They now have 30 days to find another job or return
"We came for the stability," says Ms. Sheetal, hustling into an
informational meeting for ex-Enron employees. "We thought Enron was
one of the more stable companies out there."
While Enron and Compaq are cutting 12,000 employees out of a
total workforce of 2 million here in Houston, their demise is being
felt far beyond the newly unemployed.
"Both Compaq and Enron represented icons for the new diversified
Houston," says Barton Smith, an economist at the University of
Houston. "One of the impacts will be the psychological impact of
losing these two icons."
Indeed, Enron symbolized the changing energy industry that has
moved away from oil and gas production into refining, marketing, and
distribution. But it was also emblematic of the Houston
"The Enron story is the story of Houston bravado," says Stephen
Klineberg, a sociology professor at Rice University here. …