Post-pandemic layoffs in the tech and biotech sectors continue to widen, and the brutal job losses are set to loom over the region’s economy for months.
Since mid-2022, tech and biotech companies — including giants like Google and Meta Platforms — have revealed plans to slash more than 19,000 jobs across the nine-county Bay Area, according to official state reports. That figure includes cutbacks that have been completed or are slated to occur, in some cases as late as 2024.
Even worse, multiple tech companies, including Intel, in recent days have notified the state Employment Development Department of plans to orchestrate a second round of layoffs on top of job cuts announced earlier.
“We’ve reached the point where layoffs are becoming widespread in tech and biotech,” said Russell Hancock, president of Joint Venture, a San Jose-based think tank. “But it’s important to keep these numbers in perspective.”
Hancock and other experts insist the layoffs won’t morph into an extinction event akin to the dot-com meltdown of the 2000s, when hundreds of thousands of people across the Bay Area, many of them in tech, lost their jobs.
“It’s not even close to the dot-com situation,” said Tim Bajarin, principal executive with Campbell-based Creative Strategies, which tracks the tech sector. “The dot-com bust occurred because so many people believed they could produce apps that had no business models and couldn’t generate profits.”
The dynamics this time are far different than the dot-com collapse, analysts say.
“These are companies that are making adjustments,” said Patrick Kallerman, vice president of research with the Bay Area Council Economic Institute. “This is a calculated belt-tightening. This is not even recession-level job cutting.”
With the current wave of cutbacks, Big Tech is attempting to right-size its employee base in the wake of the coronavirus outbreak, which sparked a crush of people working, meeting and learning remotely due to the government-mandated business lockdowns to combat the deadly virus. Many tech companies whose products help enable remote work responded at the time by staffing up, only to discover later that not all of the changes wrought by the pandemic were permanent.
“The layoffs are a rebalancing after a period of record job growth and do not suggest we are in danger of the kind of pain after the dot-com bust when the region lost nearly 300,000 jobs before recovering to record levels,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
The final toll from the current deluge of layoffs is unclear. What is certain is that tech and biotech companies have begun to jettison jobs in recent months at a far higher pace than before, this news organization’s analysis of the WARN notices sent to the EDD shows.
“There was an over-exuberance in the tech industry because of the coronavirus,” said Rob Enderle, an Oregon-based tech analyst. “Tech companies ramped up to meet the demand for their services and products and they thought that demand would become permanent. But the demand turned out to be transitory.”
During the final six months of 2022, from July 1 through Dec. 31, tech and biotech companies jettisoned slightly fewer than 7,100 jobs, based on the dates in the WARN notices when the layoffs were slated to take effect.
Yet from Jan. 1 of this year through Feb. 8 — a period of only about five weeks — tech and biotech firms completed or reported plans to eliminate another 12,400 positions, with the layoffs due to take place this month, in March, April, May and beyond, the WARN letters show.
Ominously, 2023 has also brought the two worst months for completed or planned job cuts in the current cycle of staffing reductions, according to the WARN notices. In January, tech and biotech companies orchestrated the layoffs of 5,384 employees in Bay Area cities. In March, the projected layoff numbers currently total about 5,248.
Meta, Google and Salesforce have each revealed plans to eliminate at least 1,000 jobs in the Bay Area, based on filings with the EDD that occurred on or after July 1, 2022. Twitter, Cisco Systems, Amazon and others have announced plans to cut at least 500. Intel, PayPal, Tesla and other high-profile companies have also slashed employee totals.
“The current correction will continue for a time in 2023 before the tech industry begins another hiring uptick,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former EDD director.
These new layoffs may well fit the tech industry’s now-familiar boom-and-bust cycle.
“Historically, these lulls have been followed by a boom,” Hancock said. “If that happens again, and soon, we shouldn’t be surprised.”
Bajarin cited a ZipRecruiter survey that emerged in late 2022 that found roughly 79% of the tech workers who lost their jobs were able to find work within about three months.
“For those who think tech is dead, we are just at the beginning of what will be the next major boom, which is artificial intelligence,” Bajarin said. “If you are a high-skill engineer and programmer, you will find a new job relatively quickly.”
These companies have revealed plans to eliminate at least 500 jobs in the Bay Area, based on filings with the EDD that occurred on or after July 1, 2022.
Meta Platforms: 2,564 job cuts in Menlo Park, San Francisco, Fremont, Sunnyvale and Burlingame
Google: 1,608 layoffs in Mountain View, Moffett Field, San Bruno and Palo Alto
Salesforce: 1,010 staff cuts in San Francisco
Cepheid: 925 job cuts in Newark and Sunnyvale
Twitter: 900 layoffs in San Francisco and San Jose
Invitae: 736 staff cuts in San Francisco
Cisco Systems: 673 job cuts in San Jose, Milpitas and San Francisco
HelloFresh (Grocery Delivery E-Services USA): 611 layoffs in Richmond
Amazon: 524 staff cuts in Sunnyvale and San Francisco
