SAN JOSE, California — Silicon Valley’s economy and job markets remain sturdy despite being jolted by a steady drumbeat of Bay Area layoffs orchestrated by tech and biotech companies, a new report released Tuesday states.
Yet the region has come to rely disproportionately on just a few companies, according to researchers for the 2023 Silicon Valley Index who determined that three firms — Google, Apple and Facebook owner Meta Platforms — account for nearly one out of every five tech jobs in Silicon Valley.
“The region recovered from pandemic job losses by April 2022,” the Silicon Valley Index report stated. “Unemployment hit a historic low.”
Despite the widening reports of tech and biotech layoffs in the Bay Area, the Silicon Valley region, defined as Santa Clara County, San Mateo County and the Fremont area, is still adding jobs, according to a report released Tuesday by Joint Venture Silicon Valley, a San Jose-based think tank.
“You might think there is a crisis in Silicon Valley” as a result of “gloom and doom” regarding tech layoffs, said Russell Hancock, president of Joint Venture Silicon Valley.
Hancock disagrees about the grim portents that loom over Silicon Valley.
“Tech is going through a painful period,” Hancock said. But he added, “There is no way to construe what is happening as a crisis” for the tech sector.
Silicon Valley tech companies, as well as those in San Francisco, launched a hiring boom during the coronavirus outbreak when numerous people began to work, shop and learn from home or other remote locations away from their workplaces and retail centers.
Now, tech companies have begun to scale back hiring and staffing levels as demand for the industry’s products and services has ebbed.
“It is a readjustment,” Hancock said.
Over the one-year period that ended in June 2022, Silicon Valley added 88,000 jobs of all categories, the Silicon Valley Index report determined. Of those, tech companies added 16,000 jobs during those 12 months.
However, the tech and biotech layoffs began to hit their worst patches in 2023, after the report time frame.
Since July 1, 2022, tech and biotech companies have disclosed plans to eliminate at least 19,500 jobs in the Bay Area. Some of those cutbacks have occurred and others are upcoming.
As the economy shifts, it’s clear that just a few tech titans are providing huge chunks of jobs in Silicon Valley, the researchers found.
An estimated 30 tech companies employ 42% of the tech workers in Silicon Valley and San Francisco, the Silicon Valley Index researchers found.
Just three companies, Google, Apple and Facebook owner Meta, account for 19% of the tech jobs in that area, according to the report.
“We look a lot more like Detroit,” Hancock said, in a reference to that region’s iconic Big Three automakers from a bygone era of American industrial dominance.
The researchers, citing the U.S. Census Bureau’s American Cities Survey, also found that the coronavirus-spawned trends of working remotely are starting to become more ingrained in the region’s economy.
In 2019, 5% of the Census respondents said they worked from home “most days of the week,” according to the Silicon Valley Index report. In 2020, that number had soared to 28% of the respondents. In 2021, the number hopped higher to 35%. the index report found. That covered people in Santa Clara County and San Mateo County.
“Remote work is here to stay,” Hancock said. “It is not a passing fad.”
