Coronavirus-linked layoffs have soared in Silicon Valley in recent months, affecting more than 21,000 employees across 26 companies in March alone, according to a San José Spotlight analysis of data from the state’s Employment Development Department.
Industries with the most layoffs were retailers, restaurants, hotels, the arts and entertainment sector, personal care services and gyms. Beyond the region, layoffs spiked in March and April across California as well.
The Silicon Valley companies that laid off the most workers in San Jose were Team San Jose with 1,304 layoffs, Goodwill of Silicon Valley with 779 workers, auto retailer the Del Grande Dealer Group with 676 employees and the commercial contracting company Therma with 447 workers.
A report released last week by Joint Venture Silicon Valley, a regional research organization, compiled nearly a year’s worth of information from the EDD, showing a massive uptick in layoffs in the past two months across dozens of industries.
Joint Venture Silicon Valley will release an updated report on layoffs next week.
“Layoffs are happening everywhere — at companies big and small — and they’re no surprise given the current circumstances,” said Rachel Massaro, the organization’s director of research. “Most of these layoffs are in exactly the industry sectors we would expect.”
Most workers were classified as temporarily laid off, a “promising sign” that many will be rehired, Massaro added.
Team San Jose, the city’s event planner and de facto tourism bureau, laid off a combination of full-time employees and a variety of people who worked at the organization in the past six months, including part-time and contract workers. Employees who worked in event production, set up, food and beverage roles were let go, officials said.
“We’re all navigating new territory,” spokesperson Frances Wong said. “The majority of our revenue streams comes from events, and when events were paused, our team members employed in event production and operational roles were all affected.”
The organization has refocused its operations to prioritize helping the city run its emergency shelters and food-distribution efforts.
“We shifted our efforts and talent from events to doing what we can for San Jose,” Wong added. “Team San Jose’s operations affects the community, and as a premier business and meetings destination for Silicon Valley, we’re not alone from an industry standpoint. We’re taking the time to reassess every angle of operation.”
Other San Jose-based employers with more than 100 layoffs include BJ’s Restaurant, The Cheesecake Factory, The Old Spaghetti Factory and Western Dental services.
Nutanix, a tech company headquartered in San Jose, furloughed 1,434 employees in the city as well as 12 workers in San Mateo and 11 in San Francisco, according to recent notices filed under the Worker Adjustment and Retraining Notification (WARN) Act, which requires a 60-day notice before a plant closure or mass layoff. Due to the pandemic, Gov. Gavin Newsom suspended the 60-day notice requirement, effective March 4, for employers who meet certain conditions.
The company has made several efforts to cut costs during the pandemic, officials said, including “two week-long unpaid furloughs” for the bulk of its employees over the next six months.
“Like almost every other company in today’s environment, Nutanix is taking deliberate and proactive expense-reduction measures that we believe to be prudent as we manage through the uncertain business conditions brought on by the COVID-19 pandemic,” spokesperson Jennifer Massaro said. “Nutanix services will remain fully available, and the furloughs have been structured so that our customers should experience little or no changes from the normal course during this period.”
Though the WARN notices list the employees as being “temporarily laid off,” Jennifer Massaro told San José Spotlight that Nutanix’s employees will not be terminated and continue to receive benefits.
“Furloughed employees are not being terminated … and will remain employees of Nutanix with access to our benefits plans, for example, during the furlough periods,” she said.
Some employers did not disclose on the WARN notices how many employees they plan on bringing back. The nonprofit Goodwill of Silicon Valley temporarily laid off 162 employees, while 617 employees’ layoffs were classified as “unknown,” meaning many of them might not be rehired.
Before the pandemic, Goodwill employed about 900 workers, which means it laid off about 86 percent of its workforce.
“We did it as a layoff and not a furlough, and the reason for that was because we didn’t feel that was right to furlough people indefinitely without knowing when we would reopen,” Goodwill of Silicon Valley CEO Michael Fox said.
The move allowed the organization to pay out its employees with vacation and sick pay, as well as save money to continue operations. In the first two weeks when Goodwill decided to furlough its employees, the decision cost the organization $1.4 million, Fox said.
“We have a lot of reserves we’ve built out over the last few years for something like this, but if we continued with our full force like that, we would have been out of money by the first week of June,” Fox added. “We just don’t know if we’ll ever get back to normal — there’s just so much uncertainty out there. But we do know that we had to stop the bleeding.”
The organization did not qualify for federal assistance such as the paycheck protection program or CARES Act funds because it has more than 500 employees, which has severely constrained its finances, Fox said. Though strapped for resources, it has continued to run its emergency operations and plans to reopen two more stores in the coming weeks.
Despite the pandemic nearly shuttering the longtime Silicon Valley nonprofit, Fox and his team are not giving up.
“I spent all last week cleaning bathrooms — we’re all pitching in to do whatever we need,” Fox said. “We’re doing what we can to survive today, so we have a fight in this for the future.”