Bay Watch: Region Ends the Year Strong, but Layoffs Loom
The Bay Area ended the year strong, adding nearly 14,000 jobs and bringing unemployment rates across the region down even further. And overall, the Bay Area added almost 153,000 jobs from December 2021 to December 2022. The San Jose metropolitan region added 1,800 jobs in December, Oakland and the greater East Bay added 3,100, while the San Francisco metropolitan region led the pack with an additional 6,400 jobs. Across the nine-county Bay Area, the region added a total of 13,600 jobs in December, a significant increase from November’s gain of 7,400 jobs.
However, these figures could be seen as deceiving, with a number of tech companies recently announcing layoffs that won’t take effect for several months and aren’t reflected in the numbers.
For years tech companies have relentlessly increased headcounts, citing rapid growth and competition for talent. Now, with an increased focus on profitability, impacts of rising interest rates and concerns about possible recession, many of them are discovering they may have grown too quickly. Only time will tell, but these moves could be seen as maturing companies making prudent but difficult decisions given their individual circumstances rather than the beginning of a bigger technology-led slide.
Over the next several months, nearly 13,000 layoffs are expected to take effect in the region. While this may lead to a couple of months of low or slightly negative job growth, it is unlikely to be catastrophic. Still, January figures will answer a critical question: is the Bay Area’s economy robust enough to absorb layoffs within the big technology firms, or do we all go as they do?