More than 6,000 tech and biotech job cuts are shaking the Bay Area economy

As recessionary pressures continue to mount in the region and across the country, technology and biotech companies have now announced plans for job cuts sufficient to eliminate more than 6,000 jobs in the Bay Area, cuts that are hurting the region’s economy Strains might come in the weeks and months.

Job cuts affecting thousands of Bay Area workers were presented to California employment officials beginning in early October, according to that news organization’s analysis of WARN letters and posts on the state’s employment development website.

“Technical layoffs are happening. People are affected, lives are disrupted,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. Hancock noted that cuts can be particularly devastating for foreign workers in the Bay Area on H-1B visas: “In some cases, it can mean deportation.”

The sobering tally: Well over 6,200 jobs affecting tech or biotech workers have been or are scheduled to be eliminated at Bay Area sites through February 2023, EDD filings show. That’s double what this news organization found in a similar review of submissions ttwo weeks ago and enough to erase all gains in the tech industry in October, which originally appeared as a month of recovery.

Experts are divided on whether the layoffs are primarily due to company-specific issues or indicate a more widespread ailment that could threaten Silicon Valley’s economy.

“The tech and biotech layoffs are not happening at a rate that will hurt the entire Bay Area economy,” said Patrick Kallerman, vice president for research at the Bay Area Council Economic Institute. “That’s not to say something else couldn’t happen. But the cuts so far seem mostly cumbersome.”

The largest known number of Bay Area tech and biotech layoffs in the current series of cuts was reported by Facebook app owner Meta Platforms, which announced plans to do so last week 2,564 job cuts in the region.

The corporate headquarters of Meta, formerly Facebook, is seen in Menlo Park, California on November 9, 2022.  (Photo by JOSH EDELSON/AFP via Getty Images)
The corporate headquarters of Meta, formerly Facebook, is seen in Menlo Park, California on November 9, 2022. (Photo by JOSH EDELSON/AFP via Getty Images)

The technology sector is in many ways the most important driver of the regional economy. But Scott Anderson, chief economist at Bank of the West, warns that this dominance could become an obstacle in a downturn.

“The concentration of Bay Area jobs in technology, finance, construction and real estate makes them more vulnerable to the shock of higher interest rates, falling stock prices and tightening financial conditions,” Anderson said.

Possible implications of these factors, Anderson added, “are just beginning to be seen.”

Here are some of the notable workforce reductions planned or recently completed by technology and biotechnology companies in the nine-county region:

Meta’s biggest wave of layoffs was set 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 come in contrast to the state’s Employment Development Agency’s latest jobs report, released Friday, which showed the Bay Area added a robust 17,600 jobs in October, driven by big gains in Santa Clara County, San Francisco-San Mateo region and the East Bay.

Tech companies added 6,300 jobs in the Bay Area in October, or 35.7% — more than a third — of all jobs added in the nine-county region last month, according to this news organization’s analysis of seasonally adjusted numbers, the Compiled and provided by Beacon Economics and UC Riverside. However, many of the newly announced job cuts are still pending and will impact the total number of jobs in the coming months.

Many of the Bay Area-based companies that are now shedding jobs are shedding far more people outside of the area. In the latest such move, Cisco Systems announced last week that it had made the decision to do so Cut 5% of its global workforce.

Leave a Reply

Your email address will not be published. Required fields are marked *