Bay Area soars to big October job gains — but tech layoffs loom
Latest jobs report was compiled during period prior to tech company layoff announcements
The Bay Area job market powered to its strongest employment gains in three months during October — although the upswing occurred before some of the area’s biggest tech companies began to reveal layoffs in a painful retrenchment.
Employers in the Bay Area added 17,600 jobs in October, led by robust hiring in Santa Clara County, the San Francisco-San Mateo region and the East Bay, which represented the strongest job gains since July, the state Employment Development Department reported Friday.
California gained 56,700 jobs last month, the report showed. That number also represented the largest surge in hiring statewide in three months, according to the EDD.
The statewide unemployment rate worsened slightly by increasing to 4% in October, up from 3.8% in September, which was the lowest on record for the benchmark.
“California has now fully recovered all jobs that were lost to the pandemic-induced recession, but we know this isn’t the finish line,” Gov. Gavin Newsom said Friday in a prepared statement.
During October, the San Francisco-San Mateo area added 6,300 jobs, Santa Clara County gained 5,500 jobs and the East Bay added 4,400 positions, the EDD reported. All of the numbers were adjusted for seasonal variations.
“It’s too early to break out the champagne on the Bay Area and California labor market outlook based on today’s better-than-expected October jobs report,” said Scott Anderson, chief economist with Bank of the West. “The Bay Area’s concentration of jobs in the technology, finance, construction and real estate makes it more vulnerable to the shock of higher interest rates, declining stock prices, and tightening financial conditions.”
Nevertheless, the latest report offers a welcome counterpoint to the dreary drumbeat of high-profile tech layoffs.
“What the tech sector is experiencing right now should probably be seen as an adjustment,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. “It doesn’t necessarily mean that there’s something ‘broken’ in Silicon Valley. These employment numbers bear that out.”
Santa Clara County and California also achieved major milestones in October — benchmarks that the two regions have been battling to reach for more than two years, since the outbreak of the coronavirus in the spring of 2020.
Both the South Bay and California have more than recouped the massive numbers of jobs they lost in March 2020 and April 2020, the first two months of draconian business shutdowns to curb the spread of the coronavirus.
The statewide economy has gained 30,800 more jobs than the 2.79 million jobs it lost during those two brutal months in 2020.
Santa Clara County has gained 6,700 more jobs than the 161,100 jobs it shed during that same time period.
In contrast, the Bay Area, East Bay, and the San Francisco-San Mateo region are still struggling to recoup their vast job losses. The Bay Area has recovered only 91.7% of its 605,600 lost jobs, while the East Bay is at 91.5% and the San Francisco-San Mateo region is at 91.3%, a Bay Area News Group analysis of the EDD reports shows.
The waves of job losses that are being revealed by tech companies are not reflected in the most recent report from the EDD. The EDD conducted its monthly payroll survey during the first half of October.
“We’ve had several periods of realignment for the tech industry,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former EDD director. “This is one of them.”
In recent weeks, tech and biotech companies have revealed plans to chop at least 6,000 Bay Area jobs, this news organization’s review of state WARN notices shows.
“The Bay Area has always bounced back from more serious declines than we are experiencing today, including the dot-com bust and the long 2007 recession with massive foreclosures,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.
Facebook app owner Meta Platforms, Twitter, Amazon, Cisco, Roku, Oracle, PayPal, Lyft and Seagate are among the notable companies that have revealed layoff plans.
“The next few months will be painful for the region but the layoffs do not threaten our long-term tech strength,” Levy said.
Despite the gloom that has descended on the tech industry, the current setbacks are nowhere nearly as severe as was the dot-com meltdown of 2000, seen at the time by some as an existential threat.
In a show of resilience, the tech sector gained 6,300 jobs in October, according to seasonally adjusted numbers compiled by Beacon Economics and UC Riverside.
Tech companies added 3,600 jobs in the San Francisco-San Mateo region, 3,100 in Santa Clara County and 100 in Sonoma County. But tech firms shed 400 jobs in Marin County and 100 in the East Bay.
Other major areas of strength: The Bay Area added 5,200 healthcare jobs and 2,900 manufacturing positions in October, the Beacon assessment shows.
Hotels, restaurants and drinking establishments suffered big cutbacks. These sectors shed 3,500 Bay Area jobs in October, primarily due to a loss of 1,300 hotel and restaurant jobs in the San Francisco-San Mateo area and 1,200 in Santa Clara County, Beacon and UC Riverside reported.
“The moral of the story is you can’t count out the Bay Area yet,” said Patrick Kallerman, vice president of research for the Bay Area Council Economic Institute. “This kind of surge in job gains points to the resiliency of our economy, both in the Bay Area as well as statewide.”
Full article by George Avalos: https://www.siliconvalley.com/2022/11/18/bay-area-california-job-gain-economy-strong-covid-tech-hotel-october/