The sole focus of the current news cycle in the Bay Area is the mass layoff of employees in Silicon Valley tech companies. Approximately 60,000 employees from various professional groups such as software developers, marketing and PR specialists, and legal and HR personnel have lost their jobs recently in the region between San Francisco and San Jose.
Several large companies have laid off employees: Google (12,000), Amazon (18,000), and Microsoft (10,000), and smaller companies and startups are following suit. These layoffs affect many employees, like Jennifer, a 37-year-old marketing and PR specialist who was let go from Facebook last October, and Helena, a 35-year-old from Germany who was developing medical devices for a tech company in California.
The tech companies explain these layoffs as a result of over-hiring during the pandemic and the threat of high inflation leading to a recession. However, this may only be part of the truth. Helena, like many other tech employees, has an H1B visa, which is linked to her employer. If she cannot find a new employer within 60 days of losing her job, she will have to leave the USA.
The layoffs are affecting local businesses as well. Restaurants, suppliers, and property owners are all feeling the impact. In San Francisco, numerous offices are vacant, and the Mayor, London Breed, is looking into converting office space into apartments to help ease the housing shortage and high rents.
Silicon Valley, after a decade of growth and a boom during the pandemic, is now experiencing a wave of layoffs. Despite these layoffs, the tech companies are still making high profits, with Microsoft earning $16 billion in the last quarter of 2022 alone. The layoffs have helped these companies reduce costs and improve their balance sheets.
The layoffs started last October, beginning with Facebook’s parent company Meta, which cut 11,000 jobs. The CEO, Mark Zuckerberg, blamed the pandemic’s rapid hiring and the looming threat of a recession.
This wave of layoffs is seen as a normalizing effect in the tech industry by some experts. Despite the layoffs, these companies are still hiring new employees. Provided there is no additional economic shock, the industry may be returning to a more stable state.
Initial studies suggest that laid-off employees find new jobs within three months, with 40% finding employment within one month according to the job platform ZipRecruiter. This could have a positive impact on the U.S. economy, given the tech industry’s significant contribution to it.
The former project manager at Facebook, Jennifer, has decided against working for a tech company again for now due to the long working hours and feeling exploited. Helena from southern Germany also plans to leave Silicon Valley and return to Europe. Despite the upheaval, both women remain optimistic about their futures.
A longer version of this text has been broadcast as a radio feature on Deutschlandfunk (Cologne) and a short version on Bayerischer Rundfunk (Munich).