As recessionary pressures continue to mount in the region and across the country, tech and biotech companies have now revealed plans for enough job cuts to cut more than 6,000 Bay Area jobs, reductions that could weigh on the region’s economy in the weeks and months. come.
Job cuts affecting thousands of workers in the Bay Area were submitted to California labor officials from early October, according to this news agency’s analysis of WARN letters and messages on the development site. state employment.
“Tech layoffs are happening. People are being affected, lives are being disrupted,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. Hancock noted that the cuts affecting foreign workers who are in the Bay Area on H-1B visas can be particularly devastating: “In some cases, it can mean they will be deported.”
The sobering total: Well over 6,200 jobs affecting technology or biotechnology workers have been cut or are expected to be cut at Bay Area sites by February 2023, according to filings by the EDD. That’s double the number this news agency found in a similar review of filings two weeks ago, and it’s enough to wipe out all the gains the tech industry posted in October, which initially appeared to be a month of rebound.
Experts disagree on whether the layoffs are primarily due to company-specific issues or point to a more widespread illness that could threaten Silicon Valley’s economy.
“Layoffs in the tech and biotech sector are not happening at a rate that will hurt the overall Bay Area economy,” said Patrick Kallerman, vice president of research for the Bay Area. Council Economic Institute. “That doesn’t mean that something else might not happen. But the cuts so far appear to be mostly circumstantial.
The largest known number of Bay Area tech and biotech layoffs in the current round of cuts was reported by Facebook app owner Meta Platforms, which revealed last week its intention to cut 2,564 jobs in the region.
In many ways, the technology sector is the main driver of the regional economy. But Scott Anderson, chief economist at Bank of the West, warns that dominance could become a hindrance in a downturn.
“The Bay Area’s concentration of jobs in technology, finance, construction and real estate makes it more vulnerable to the shock of rising interest rates, falling share prices and tighter financial conditions,” Anderson said.
The potential effects of these factors, Anderson added, “are just starting to become visible.”
Here are some of the notable workforce reductions planned or recently completed in the Nine Counties region by technology and biotechnology companies:
- Meta Platforms, 2,564 jobs in Menlo Park, San Francisco, Sunnyvale, Burlingame and Fremont
- Cepheid, 1000 in Newark, Sunnyvale and Santa Clara
- Twitter, 890 in San Francisco and San Jose
- Amazon, 263 in Sunnyvale
- Lyft, 227 in San Francisco
- Oracle, 200 in Redwood City and Belmont
- Chime, 152 in San Francisco
- Astreya, 144 in Newark
- Zymergen, 110 in Emeryville
- Kitty Hawk, 100 in Mountain View
- WeDriveU, 97 in Newark and Menlo Park
- BioMarin Pharmaceuticals, 94 in San Rafael and Novato
- Roku, 93 in San Jose
- onsemi, 88 in San Jose
- Seagate, 84 in Fremont
- PayPal, 59 in San Jose
- Natera, 58 in San Carlos
- FormFactor, 52 in Livermore.
The bulk of Meta’s layoffs were to take place in Menlo Park, where the company has its global headquarters. The Facebook owner is cutting 1,642 jobs in Menlo Park, 362 in San Francisco, 237 in Sunnyvale, 179 in Burlingame and 144 in Fremont.
The cuts contrast with the state’s Department of Employment Development’s latest jobs report, released Friday, which showed the Bay Area added 17,600 jobs in October, thanks to big gains in Santa Clara County, the San Francisco-San Mateo area and East Bay.
Tech companies added 6,300 jobs in the Bay Area in October, or 35.7% — more than a third — of all positions that were gained last month in the nine-county area, according to the analysis by this news agency of seasonally adjusted figures that Beacon Economics and UC Riverside compiled and provided. But many of the recently announced job cuts have not yet been implemented and will affect the total number of jobs in the months to come.
Many companies based in the Bay Area are now cutting jobs by eliminating a much larger number outside the region. In the latest such move, Cisco Systems revealed last week that it has decided to cut 5% of its global workforce.
This could result in the loss of more than 4,100 Cisco employees worldwide. Cisco employed 83,300 workers at the end of July 2022, according to a filing with the Securities and Exchange Commission.
During the worst months of the coronavirus-related lockdowns, many tech companies took advantage of a huge surge in demand for tech services and equipment that would bolster working from home, distance learning, or e-commerce.
But as people returned to working, shopping, and learning in person, they began to reduce demand for these technologies.
“There’s nothing wrong with Silicon Valley,” Hancock said. “It’s not a gold rush that’s gotten out of hand. It’s not a dot-com bust. Some companies overestimated how much talent they would need and how many perks they would offer. Tech companies do what they always do. They reduce and make a course correction.
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