A Google sign on top of a building with blue sky above.
Google is one of the top tech companies in Santa Clara County laying off workers. Photo by Pawel Czerwinski on Unsplash.

Silicon Valley made everything the world needed when the pandemic reared its head, including testing kits, medical records software and virtual meeting platforms — and with it came a tech sector hiring frenzy.

But after COVID subsided and the Bay Area began adjusting to a post-pandemic world, scores of tech workers started losing their jobs. Santa Clara County workers were hit hard.

Nearly 16,800 tech employees have been laid off since July 2021 on the heels of unprecedented hiring during the pandemic, according to a San José Spotlight analysis of company-reported layoff notices required by state law. The Worker Adjustment and Retraining Notification (WARN) system requires companies with 100 or more employees to report when they are issuing layoff notices.  The data is recent as of Feb. 7.

When pandemic demand surged for Silicon Valley’s exports, company hiring spiked the region’s market cap to an unheard $16 trillion, according to Russell Hancock, CEO of Joint Venture Silicon Valley, a regional consortium of government and business leaders.

“Then the pandemic begins to recede,” Hancock told San José Spotlight. “And we get to the point where we’ve actually turned the corner to declaring the pandemic over. There was a tapering demand for the same things. And there wasn’t going to be continued growth.”

Between March 11, 2020 — the official declaration of the COVID-19 pandemic — and June 2021, Santa Clara County saw more than 4,880 tech layoffs. The following year saw a drastic dip with just 750 tech layoffs from July 2021 through June 2022, reflecting the business sector’s explosive growth.

But the following year brought a dramatic change, with the state recording more than 9,000 tech layoffs in Santa Clara County between July 2022 and June 2023.

Feeling the hurt were diagnostic companies such as Sunnyvale-based Cepheid, which distributed virus testing kits, as well as major Internet engines including Google, Microsoft and Meta Platforms — parent company of Facebook — due to what Hancock describes as an industry pivot to efficiency.

All of the things that Silicon Valley companies became famous for — the perks, the on-campus high-end cafeterias — became less necessary when a remote-hybrid culture emerged on the other side of the pandemic, Hancock said.

“Companies are saying, ‘If we’re operating more efficiently, we can have a better rate of return for our shareholders while we’re in this in-between phase,'” Hancock told San José Spotlight.

California recorded an additional 6,800 layoffs in Santa Clara County between July 2023 and the first week of February. The lower number reflects the fact that there are three months left in the state’s current layoff reporting period.

While he acknowledges the recent layoffs are significant, Hancock stops short of characterizing them as a crisis.

“Silicon Valley’s workforce is about 1.5 million. So when you take those recent layoffs, you realize that’s actually a very small percentage compared to the dot-com crash of 2000,” Hancock told San José Spotlight. “It would be wrong to call it a crisis. We have to call it something else. A recalibration.”

Local economist Chuck Cantrell questions where that recalibration is happening. He said there are gaping holes in the layoff data reported to the state, largely because the state asks for so little information.

Specifically, Cantrell wonders how many of those laid off workers are people of color.

In December, Cantrell released a nine-minute video that shined a staggering spotlight on racist societal structures and business cycles that disproportionately punish African Americans in the expensive Silicon Valley.

“African Americans are consistently the last to be hired by corporations, and because of this kind of basic HR system — which appears to be fair from a distance — that means we are the least experienced and the first to be let go,” Cantrell told San José Spotlight. “It’s been that way, structurally, for a while. But if you start diving into those numbers, you notice this is consistent with one group and not as consistent as others.”

Researchers are trying to pull back the curtain on tech layoff data. Last year, an annual report by San Jose State University showed women comprised 47% of the tech layoffs from September to December 2022, even though women represent 39% of tech workers.

Cantrell said another constant is tech companies often hire brown people as contractors.

“Those folks don’t meet the WARN Act criteria and so they get let go with very short notice. It never gets tracked at all,” Cantrell said. “If we had that, we could easily see this pattern across the board.”

Contact Brandon Pho at [email protected] or @brandonphooo on X, formerly known as Twitter.

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