Oct 3, 2022 - Business

Tech layoffs afoot in San Francisco

A passenger waiting to board his plane walks in front of a sign advertising Twilio at San Francisco International Airport in San Francisco, California

A passenger walks in front of a Twilio ad at SFO. Photo: Robert Alexander/Getty Images

Layoffs are in the air in San Francisco.

What's happening: Local tech companies — big and small — have announced staff reductions in recent weeks amid an uncertain economic landscape.

  • Twilio and DocuSign, both publicly traded companies with around 7,500 employees each, said in September they'd let go of roughly 10% of their respective staffs to prioritize profitability.
  • Divvy Homes, a real estate startup, laid off 40 employees (about 12% of its workforce) last Tuesday in response to rising mortgage interest rates.

Tech giants are looking to make cuts, as well.

  • Citing the unstable economy, Meta CEO Mark Zuckerberg announced a hiring freeze in an all-hands meeting last Thursday, and said that for the first time in its 18-year history, the company would look to reduce its staff in 2023, Bloomberg reported.
  • The cuts will make Meta "somewhat smaller" by the end of next year. The downsize will be a result of letting roles go unfilled when people leave or by trying to "manage out people who aren't succeeding," Zuckerberg said, according to Bloomberg.

What we're watching: Whether these recent layoff and hiring freeze announcements indicate a rough road ahead for local job-seeking tech workers, or if they will reshuffle into new companies.

By the numbers: The city's chief economist, Ted Egan, told Axios that tech employment across San Francisco and San Mateo counties did not grow in August.

  • 181,800 people had tech jobs in the area in August, according to data from California's Employment Development Department, the same number as in July.
  • "It's one data point, and it may go up again next month," Egan said. "[But] it could be a worrying sign … if you don't see [layoffs] offset by other kinds of hiring."

Zoom out: Egan also said "there has been a significant decline in the number of new job listings in San Francisco since the spring, especially in the tech industry."

  • A jobs tracker from Indeed also shows a decline in listings in recent months for all sectors across the Bay Area.
  • Still, earlier this summer, the Wall Street Journal reported more reassuring news that nationally, for every one unemployed person seeking work, there were nearly two jobs available.

The U.S. unemployment rate was 3.7% in August — up slightly from 3.5% in July, which was the lowest in nearly half a century.

What they're saying: One San Francisco resident who was recently let go from his tech job, told Axios he was less concerned about the macro environment and more worried about the timing heading into Q4, which he said, is traditionally a harder time to land a new role.

  • He felt some reassurance, though, given the rise of remote work and being able to look for jobs at companies across the country.

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