A Lot Further to Fall

The Bay Area economic outlook is gloomy as tech companies, including some big names, announce thousands of job cuts:

Tech companies are eyeing layoffs that will eliminate jobs for thousands more workers in the Bay Area, a brutal new round of terminations poised to jolt the owner of the Facebook app, Amazon and Juul Labs.

All told, tech companies have decided to chop 2,564 more Bay Area jobs, according to official notices that the firms sent to the state labor agency.

The tech and biotech job cuts in the Bay Area: well over 10,000 in October, November and December, according to this news organization’s review of numerous WARN letters to the state Employment Development Department.

Are 10,000 jobs a lot? Numerically speaking, 10,000 is "only" 0.4% of total employment in the SF-Oakland-Hayward triangle of 2.5 million. But the impact is much greater than the direct numbers indicate.

Loss of higher-income tech jobs affects the economy more than the loss of lower-paid ones.

Companies cut back on other expenses, e.g., travel, conferences, restaurants, supplies, before turning to layoffs. Lowering these other expenses affects thousands of supporting companies and their employees in the region.

The real estate market, already slowed by higher interest rates, continues to spiral down as more residents have difficulty making rent or loan payments.

Elon Musk has shown that Twitter could lay off more than half its 7,500 employees and still function. If that's indicative of the bloat in other tech companies, employment has a lot further to fall.