As recessionary pressures continue to mount around the region and across the country, tech and biotech companies have now revealed plans for enough job cuts to erase more than 6,000 jobs in the Bay Area, cutbacks that could weigh on the region’s economy in the weeks and months to come.
Job cuts affecting thousands of workers in the Bay Area have been submitted to California labor officials starting in early October, according to this news organization’s analysis of WARN letters and posts on the state Employment Development site.
“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 cuts affecting foreign workers who are in the Bay Area on H-1B visas can be particularly devastating: “In some cases, it may mean that they will be deported.”
The sobering total: Well over 6,200 jobs affecting tech or biotech workers have been cut or are scheduled to be eliminated at Bay Area locations by sometime in February 2023, the EDD filings show. That’s double the number this news organization found in a similar review of filings two weeks ago, and is enough to wipe out all the gains the tech industry posted in October, which initially had appeared to be a rebound month.
Experts disagree over whether the layoffs are primarily due to company-specific issues, or indicate a more widespread ailment that may threaten the Silicon Valley economy.
“The tech and biotech layoffs are not happening at a rate that will damage the overall Bay Area economy,” said Patrick Kallerman, vice president of research for the Bay Area Council Economic Institute. “That’s not to say that something else might not occur. But the cuts so far appear to be primarily circumstantial.”
The largest known total of Bay Area tech and biotech layoffs in the current crop of cutbacks was reported by Facebook app owner Meta Platforms, which last week revealed plans to eliminate 2,564 jobs in the region.
By many measures, the tech sector is the primary engine of the regional economy. But Scott Anderson, chief economist with Bank of the West, warns that this dominance could become a hindrance in a downturn.
“The Bay Area’s concentration of jobs in the technology, finance, construction and real estate space makes it more vulnerable to the shock of higher interest rates, declining stock prices, and tightening financial conditions,” Anderson said.
Potential effects of these factors, Anderson added, “are just now starting to become visible.”
Here are some of the notable staffing reductions being planned, or recently completed, in the nine-county region by tech and biotech companies:
- Meta Platforms, 2,564 jobs in Menlo Park, San Francisco, Sunnyvale, Burlingame and Fremont
- Cepheid, 1,000 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.
Meta’s biggest chunk of layoffs was slated to occur in Menlo Park, where the company has its world headquarters. The Facebook owner is eliminating 1,642 jobs in Menlo Park, 362 in San Francisco, 237 in Sunnyvale, 179 in Burlingame and 144 in Fremont.
The cuts stand in contrast to the most recent jobs report from the state Employment Development Department, released on Friday, which showed that the Bay Area added a robust 17,600 jobs in October, powered by big gains in Santa Clara County, the San Francisco-San Mateo region and the East Bay.
Tech companies added 6,300 Bay Area jobs in October, or 35.7% — more than one-third — of all the positions that were gained last month in the nine-county region, according to this news organization’s analysis of seasonally adjusted figures that Beacon Economics and UC Riverside compiled and provided. But many of the newly announced job cuts have yet to be made, and will affect job totals in coming months.
Many of the Bay Area-based firms now trimming jobs are eliminating far larger numbers outside of the region. In the latest such move, Cisco Systems last week revealed that it has decided to eliminate 5% of its worldwide workforce.
That could work out to a loss of more than 4,100 Cisco workers globally. Cisco employed 83,300 workers at the end of July 2022, as disclosed in a filing with the Securities and Exchange Commission.
During the worst months of the coronavirus-linked lockdowns, many tech companies reaped the benefits of a huge surge in demand for tech services and gear that would bolster working from home, distance learning, or online commerce.
But as people have returned to more in-person work, shopping and learning, they have begun to scale back demand for those technologies.
“There is nothing wrong with Silicon Valley,” Hancock said. “This is not a gold rush that got out of control. This is not a dot-com bust. Some companies overestimated how much talent they would need and how many perks to give out. Tech companies are doing what they always do. They are scaling back and making a course correction.”
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