The Bay Area posted big job gains during December, a rise that countered the impact of months of tech layoff announcements and accounted for the vast majority of California’s job gains, a report showed Friday.
“Despite frequent headlines about layoffs in the tech sector, Bay Area employers expanded payrolls in December,” said Taner Osman, research manager at Beacon Economics.
Still, on Friday, Mountain View-based Google revealed it would cut 12,000 jobs worldwide, the largest cut in the company’s history. While no specific jobs or locations have been secured, the move will have a significant impact on the tech giant’s Bay Area workforce.
The twin job announcements — one encouraging, one discouraging — have created challenges for those trying to divine the true strength of the Bay Area economy.
“We don’t see anything catastrophic happening with technology,” said Patrick Kallerman, vice president of research at the Bay Area Council Economics Institute. “I don’t see the tech industry collapsing.”
The good news: Bay Area employers added 13,600 jobs last month, down from 84% of California’s December job gains, the state Department of Employment Development reported Friday.
The San Francisco-San Mateo region added 6,400 jobs, the East Bay gained 3,100 positions and Santa Clara County added 1,800 jobs, according to the EDD. All figures are seasonally adjusted. The EDD reports that California added a total of 16,200 jobs in December.
“California continues to lead the nation’s economy,” Governor Gavin Newsom said in prepared remarks about the EDD’s latest employment report. “December capped a year of consecutive monthly job gains in 2022.”
The statewide unemployment rate remained unchanged at 4.1%
Even so, tech layoff announcements continue to rise. Friday’s Google news was preceded by an announcement Thursday from Intel — the chipmaker said it was cutting about 200 jobs in Santa Clara.
Twitter, Salesforce, Cisco, Doordash, Amazon, Lyft, Oracle, Roku, PayPal, Cepheid and Seagate are among other high-profile tech and biotech companies cutting jobs or planning layoffs in the Bay Area.
Tech companies have announced plans to eliminate more than 11,000 jobs in the Bay Area based on their official notices to the EDD covering the period from Oct. 1 through today, according to a Bay Area News Group investigation.
The local impact of tech layoffs could be amplified with the revelation of upcoming job cuts at Google affecting 6% of the company’s workforce globally.
It’s been more than a decade since Google announced its headcount for the Bay Area. However, data from the two cities and estimates based on how much square footage the search giant occupies provide some clues about the potential impact in the Bay Area.
Google’s Bay Area workforce could reach 50,000 sometime in 2022. That number includes 26,000 workers in Mountain View and 13,600 in Sunnyvale, according to separate official reports from the respective cities.
In addition, commercial real estate experts say Google occupies 1.5 million square feet of offices in Redwood City, enough space for 6,000 to 7,500 employees, and 1 million square feet in San Francisco, which can accommodate 4,000 to 5,000 employees.
That’s between 49,600 and 52,600 Googlers for those four cities. The company also has a presence in San Jose, which is sure to expand with development proposals, leases and property purchases.
If Google employs 50,000 people in the Bay Area, a 6% cut would equate to 3,000 employees.
Many of those Bay Area layoff plans, including a decision by Facebook app owner Meta Platforms to cut 2,564 jobs in nine counties, will take effect in 2023.
That means the impact of those employment declines didn’t show up in the monthly EDD report for December — even though it did on the Bay Area economy.
The tech sector performed strongly in the Bay Area last month, despite seasonally adjusted numbers compiled by Beacon Economics and the UC Riverside Center for Economic Forecasting after analyzing the EDD report.
In addition to the uptick in technology, December also saw strong gains in construction, hotels, restaurants and healthcare, Beacon and UC Riverside analyzed.
Experts are trying to determine whether the tech layoff announcements will eventually cause job markets in the Bay Area and California to buckle under the weight of lagging sectors, or whether the two regions will move forward despite the burdens.
So far, so good, according to Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.
“The big question on everyone’s mind is whether this is going to lead to a sustained recession or whether it’s going to take the nation into recession,” Hancock said, referring to the layoffs of tech workers. “None of this is happening yet. We are still creating jobs.”