Gunderson Dettmer Stough Villeneuve Franklin & Hachigian laid off at least half of the newest class of associates in its biggest office Monday, in a sign of deepening woe in Silicon Valley.
The 130-lawyer firm let go five of 10 first-years in Silicon Valley, according to two laid-off associates. A second-year was also let go from that office. The cuts also included one associate in Boston and one in San Diego, those associates said.
They say the firm counted about 90 associates in its four offices before the layoffs.
Name partners at the firm did not return late-afternoon e-mails seeking comment.
Gunderson Dettmer is the latest in a string of firms to announce associate layoffs.
Partners there told the associates that the decision was not made based on performances, but in response to a slowdown in work that would stretch into 2009, the two associates said.
One of them said that a severance package was offered to cover at least three months.
Most of the first-years had summered at the firm in 2007 and only started in October.
"I think it was obvious that they had overhired," said one of the associates, who spoke on condition of anonymity. "They hire a year-and-a-half or two years in advance. That was just a whole different climate than it is now."
While the associates indicated they were not taking the situation personally, they did say they are stunned and a bit worried about what's next. "We were all pretty upset as the firm spent a considerable amount of time selling their image as a smaller, more caring firm, but obviously that didn't last," one of the associates said. "It's going to be rough trying to find new positions as junior associates, especially with the current economy."
In November, The Recorder reported the firm's Silicon Valley office was moving from Menlo Park to the east side of Highway 101. At the time, partner Robert Gunderson Jr. denied that the firm was moving to save money, but a broker said the cost-per-foot was lower. "We had a terrific year last year, and all signs point to us having a very good year this year," Gunderson wrote in an e-mail then.
History is repeating for the corporate firm. The firm, founded in 1995 by partners from Brobeck, Phleger & Harrison, prompted a nationwide associate salary war in 2000 when it raised first-year pay to $125,000, plus a guaranteed minimum bonus of $20,000.
But when the dot-com bust came along in 2001, the firm canceled guaranteed bonuses for associates. Between that year and 2002, the firm also went through multiple rounds of layoffs, letting go of at least 24 associates, plus some staff.
By 2004, things were looking up: The firm gave salary bumps to all associates but first-years. In 2007, it pushed first-year pay to $145,000, and has since gone to $160,000.
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