(FORTUNE Magazine) – Bruce Chizen, CEO of Adobe Systems, has no shortage of good things to talk about. Since getting walloped by the tech recession, Adobe has revamped its strategy and watched its revenues, profits, and stock price all rise this year.

But get Chizen in a room, and it might be a while before he'll tell you all that. What really gets him excited is the state of the Silicon Valley job market. You read that right. Unemployment around Adobe's San Jose headquarters tops the nation at nearly 9%; it would be more than double that if some 100,000 people hadn't fled in the past three years. Sky-high office-vacancy rates, at more than 20% in spots, have some developers talking of tearing down new buildings to put up houses. It's hard to go to a dinner party in the Valley without running into at least one person out of work.

Since early 2001, Adobe has been part of the problem, laying off some 700 employees. So why is Chizen all smiles? Because he's also been hiring like mad, signing people he never could have in the boom. "Then, we'd be lucky if we got five of ten things we were looking for in a candidate. Today we can easily find more than one person for each job that meets all ten."

It may sound cruel for a CEO to rejoice about the misfortunes of others. But then, the Valley has always served up its free-market beliefs with a Darwinian glaze. CEOs like Chizen are using the downturn to remake their firms. And they are unapologetically doing so by working the Valley's talent glut, systematically axing workers who don't fit their plans and hiring better ones with more applicable skills.

Chizen realized in 2001 that Adobe needed to distance itself from its dependence on consumer and creative software like Photoshop. Instead he wanted to target big corporations, emphasizing products that worked with the ubiquitous Adobe Acrobat PDF standard. But his people were trained to deal with graphic artists, not CIOs. So with the change of strategy came massive turnover in key areas like sales and marketing. In the past three years, thanks to replacements and 700 new hires, 50% of Adobe's 3,400-person workforce are new employees.

Storage software giant Veritas has found a sea of idle hands up and down Highway 101 eager to be hired, despite its accounting scandal and the resignation last year of its CFO for lying on his resume. In the past two years CEO Gary Bloom has replaced almost his entire executive team and 800 other employees with higher-caliber talent. Now, as it retools to be able to support more platforms and to move deeper into services, Veritas is finding it cheaper to hire anew than to spend the time and cash retraining: "We want to be in a position when the economy turns around to focus on speeding the boat up rather than just raising the sails," says Bloom.

It's been the same revolving door at BEA Systems. In the past two years CEO Alfred Chuang has replaced nearly half his 3,000-person staff. BEA is trying to broaden its software business beyond application servers--equipment critical to the operation of corporate websites--into the business of IT integration. "The people who are here now are the ones who want to be here for the long term," Chuang says. Or at least they're the ones BEA wants to stick around.

So in case anyone asks, jobs are being filled in the Valley. But they're disappearing just as fast. --Fred Vogelstein