It seems like every few weeks there’s news of Silicon Valley tech workers getting hit by wave after wave of mass layoffs. So why doesn’t it feel like the Bay Area is in a recession? After all, it’s just as hard as ever to buy a house in San Francisco and the region is still the powerhouse for the state’s economy.
Earlier this month Oracle cut more than 500 jobs in the Bay Area as part of a wider workforce reduction totaling roughly 30,000 workers globally. In July, Meta will begin laying off 3,000 workers in Menlo Park, Sunnyvale, Burlingame, San Francisco and Fremont. LinkedIn will also slash more than 500 jobs in Sunnyvale, where it’s headquartered, as well as San Francisco and Mountain View. Last October, Cisco eliminated over 200 Bay Area jobs, and in May the San Jose-based company began eliminating about 4,000 additional jobs globally, despite posting record earnings.
But this is actually a slower pace of layoffs than 2022, said Sarah Bohn, the vice president and director of the Public Policy Institute of California’s Economic Policy Center. She said the Bay Area economy has remained stagnant in terms of employment and job growth over the past year or so. Though that sounds underwhelming, it’s a relatively promising sign that the industry has moved forward from its post-pandemic cutbacks.
The unemployment rate within the tech industry also remains the lowest across the broader economy, and those who get laid off within the sector often find other work “in pretty quick succession,” said Bohn.
- Bohn: “The layoffs announcements are striking and it sounds like a lot of people are affected, but we’re talking about a really large sector. … If you’re laid off or things are changing at your tech firm, there are nonetheless other opportunities in the California economy for a lot of those folks.”
Jeff Bellisario, the Bay Area Council Economic Institute’s executive director, also told me that generous severance packages from tech companies and investments in the well-performing stock market allow laidoff workers more buffer and disposable income, respectively, as they look for new work.
But that doesn’t mean things will always be steady: If large layoffs continue, we could in time see a notable drop in the Bay Area job market, said Bohn.
Finding a new job has also become more difficult in certain tech sectors, now that the industry is “growing through other means that’s not tied to human capital,” said Bellisario, such as data centers and artificial intelligence.
- Bellisario: “Tech employees have opportunities. But now that the labor market is more challenging, it’s not the frothy tech labor market that we had just a few years ago.”
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CA primary race updates
Democrat Xavier Becerra clinched the lead in the primary race for governor on Friday, but who he will face in November is still up in the air, reports CalMatters’ Jeanne Kuang.
Republican Steve Hilton currently holds a slight lead over Democrat Tom Steyer. If Hilton advances, Becerra would be heavily favored to win in the general election given that Democrats in California outnumber Republicans. But if Steyer advances, we can expect an intense showdown among the Democratic Party.
It still may be days or even weeks until all ballots are counted, but President Donald Trump and Assistant U.S. Attorney Bill Essayli have already raised concerns, without evidence, about widespread election fraud in the state. Essayli said Friday that multiple investigations are underway. Though California Democratic officials acknowledged the state’s slow vote count, they nonetheless upheld the election’s integrity.
- Insurance commissioner: Democrat Jane Kim advanced and could face fellow Democrat Ben Allen.
- Lieutenant governor: Democrat Fiona Ma advanced and could face Republican Gloria Romero.
- Superintendent of public instruction: Sonja Shaw and Richard Barrera advanced.
- Treasurer: Democrat Eleni Kounalakis and Republican Jennifer Hawks advanced.
- CA-6: Rep. Kevin Kiley, who left the GOP to switch districts and run as an independent, is poised to face former state Sen. Richard Pan, a Democrat, who has a slight lead for second.
- CA-7: Democratic incumbent Rep. Doris Matsui advanced and could face Sacramento City Councilmember Mai Vang, a fellow Democrat.
- Los Angeles mayor: GOP candidate Spencer Pratt falls behind Democrat Nithya Raman in race to face Democratic incumbent Karen Bass in November.
Votes are still being counted. Check out CalMatters’ live election results.
Proposed cap on R&D tax credits raises alarm
Gov. Gavin Newsom’s proposal to get corporations to pay more taxes is triggering alarm among California’s life sciences industry, reports CalMatters’ Levi Sumagaysay.
Newsom’s budget plan includes a limit on tax credits that businesses can claim each year. The proposed cap would affect the largest corporate taxpayers — fewer than 100 — in California, and raise an estimated $850 million in state revenues in 2026-27.
The cap would also notably reduce the state’s research and development credit, prompting California’s life sciences industry to urge lawmakers to reject Newsom’s proposal. If California reduces the R&D credits that biotech, pharmaceutical and medical device companies have long relied on, it argues, companies may relocate to other states. The cap could also threaten hiring.
- Tim Scott, president and chief executive of Biocom, an industry group: “That R&D tax credit keeps those jobs here, it keeps the facilities being built here, and without it it becomes much more problematic.”
California Voices
Changes to how the state distributes funding for elderly supportive services has the potential to strip funding from high-need communities and leave thousands of elderly Californians without meals, writes Maral Karaccusian, director of the L.A. County Aging and Disabilities Department.
State lawmakers should ensure that Treatment Atlas — a free online tool that details whether an addiction treatment facility uses evidence-backed approaches — survives the budget process, writes David Sheff, author of “Beautiful Boy: A Father’s Journey Through His Son’s Addiction.”
Other things worth your time:
Newsom’s “traffic jam”: CA state workers rent another billboard in protest of return to office mandate. // The Sacramento Bee
Housing fight in beach town: A long-delayed affordable housing project in Half Moon Bay faces new resistance. // SFGATE
Data center moratorium on the table in Imperial County. // Inewsource
Richard Nixon is doing great on Instagram. // L.A. Material
More desalination in San Diego’s future? A Trump administration official envisions more desalination plants off the CA coast. // Voice of San Diego
What’s up with the helicopters? Military-like training in Southern CA cities is the FBI’s prep for the World Cup. // The Orange County Register
A powerplay for coal: The Trump administration wants to fund a controversial coal export terminal in West Oakland // Oaklandside
That’s a lot of red ink: Fresno County anticipates a $300M deficit with cuts to social services from Trump’s “one big beautiful bill” accounting for much of the damage. // Fresnoland
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