Today’s headlines trumpet the loss of 598,000 jobs last month — the worst in 34 years — but what does that mean for Silicon Valley, the home of technology? In order to get a sense of what’s happening with venture-backed startups, peHub talked to a local recruiter, who says it’s worse than the dot-com bust was for the Valley. VCs see this recession lasting a long time, she said, hence the deep cuts.

In other words, if you’re really awesome, you might get a job (with a pay cut). Meanwhile, over at Fortune, the pessimists are speculating that this time technology won’t save us from this downturn, alleging that the dot-com bust wasn’t even this bad because that’s when Google was formed.

According to the article, technology won’t save us because there are no big new technologies to create jobs and boost productivity — and even if there were, no venture firms are funding them. That’s ludicrous. The big technologies tied to mobile computing, faster broadband and mobile broadband are going to make people much more productive wherever they are. Cloud computing is going to change the economics of information technology. And all of these innovations are pushing us toward — and giving us the tools to work in — an on-demand economy.

I think the way our careers and jobs are going to be managed is part of this change. A larger portion of the workforce (like it or not) is going to look more like freelancers or consultants, working on demand. That change means the government will need to step up with health care for the self-employed, and retirement planning will become an even bigger issue.

As for the funding issue, it’s true that VCs are throwing around less cash than before, but they’re still backing startups — even hunting for bargains.

Either way, the job loss and recession are hitting Silicon Valley hard, and the only way out may be the kind of shift in the way society functions. But if we’re talking about folks bold enough to build companies in their garages, I wouldn’t count them out for long.