Bay Area loses thousands of jobs in tech recession
Bay Area employers have cut thousands of jobs in a volatile economy that suggests waves of recession in the struggling tech industry are affecting the region’s job prospects.
Most of the job losses last month in the Bay Area were due to large job cuts in the South Bay and San Francisco metro area, according to new state reports released Friday.
“The Bay Area economy is struggling, and monthly job growth has been stagnant for nearly two years now,” said Scott Anderson, chief economist at BMO Capital Markets. “Technology downsizing has been a constant and constant theme.”
Across the Bay Area, 3,400 jobs were lost in July, marking two consecutive months of job losses in the nine-county region, according to figures compiled by the Department of Labor Development.
Marin’s unemployment rate was 4.1% in July, ranking fourth lowest in the nation. The unemployment rate in the district was 3.7% in June and 3.3% in July 2023. The workforce last month was 132,600 people.
The worst job losses in the Bay Area last month occurred in two urban centers with many technology companies, according to the state’s monthly report on California’s job market.
The South Bay lost 1,300 jobs last month. However, the worst job losses occurred in the San Francisco-San Mateo metro area, which eliminated 2,000 jobs, the state report showed.
The East Bay managed to gain only 300 jobs, indicating that the Alameda County-Contra Costa County region is losing steam.
Tech companies shed a total of 2,300 jobs in the Bay Area in July, according to the Bay Area News Group, which compiled seasonally adjusted industry figures obtained by Beacon Economics from a state report.
Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy, said: “The decline in technology continues to hold back job growth in the region.”
The San Francisco-San Mateo area had the worst tech sector losses in July, according to the Beacon survey. The San Francisco metro area lost a total of 900 tech jobs. The South Bay lost 800 tech jobs in July, while the East Bay shed 700 tech jobs.
“Our driving industries like technology are rebalancing and evolving as they pursue clean energy, electric vehicles, battery technology and artificial intelligence,” said Russell Hancock, president of the Joint Venture. Silicon Valley, a think tank based in San Jose.
During the two-year shutdown caused by the coronavirus ordered by state and local agencies, technology hiring increased to meet the demand for remote work and distance learning.
However, as workers gradually returned to the office, the need for remote tools and services decreased. Technology companies have found that they have more employees.
At the same time, technology companies focused on the promising field of artificial intelligence. This shift has created even more jobs as tech companies cut redundant roles and employees to pursue AI opportunities.
Michael Bernick, an attorney at the law firm Duane Morris and a former director of the federal labor department, Michael Bernick, said: “The technology was expected to be phased out in 2022 and 2023, because of the situation “The current level of technological decline is greater than expected and may represent structural changes. It’s too early to tell. ”
The brutal job market in the San Francisco metro area is weighing on the entire Bay Area.
In the first seven months of 2024, the Bay Area gained 1,600 jobs. The East Bay is the strongest region in the Bay Area, adding 7,000 jobs. The South Bay added 3,800 positions. The San Francisco-San Mateo area lost 11,200 jobs, while the San Francisco metro area lost jobs every month this year.
“The San Francisco area reported a decline in employment over the past six months after receiving less income through the end of 2023 and is the only metro area in California that has seen no job growth in the past 12 months. ago,” said Jeffrey Michael. an economist based in Stockton and the University of the Pacific.
The job picture was brighter statewide compared to the Bay Area, the EDD report showed.
California added 21,100 jobs in July, marking five straight months of job gains in the state’s largest state.
The national unemployment rate in July remained unchanged from June at 5.2%. California’s current numbers, however, are much worse than the low 3.8% unemployment rate in August 2022.
With the tech industry struggling recently, economists have suggested that the Bay Area use the sector’s sluggishness to plan for the future.
“A key priority is to make the region competitive for the next generation of technology job growth,” Levy said.
Of particular concern is the inability of political and business leaders to take any meaningful action towards ensuring more housing supply and finding solutions to the region’s seemingly intractable traffic problems.
“Long term, we’re in a good position to be competitive,” Hancock said. “If people really want to worry about the economy, I suggest they focus on our chronic housing shortage.”
In the short term, however, the Bay Area’s job woes may continue for a while.
Jeff Bellisario, executive director of the Bay Area Council Economic Institute said: “We can expect slow growth for the rest of the year as the tech economy remains stagnant and the state’s business climate continues to reviewed by business leaders.
Marine personnel information
July unemployment rate for Marin County and select areas.
Marin County 4.1%
Logging 5.2%
Fairfax 9.6%
Inverness 11.2%
Larkpur 1.9%
Mill Valley 2.8%
Novato 4.1%
San Anselmo 3.7%
San Rafael 3.9%
Sausalito 4.8%
Tamalpais/Homestead Valley 2.6%
Source: California Department of Employment Development
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