By Suzanne Phan
SAN FRANCISCO (KGO) — Economists are calling this a truly unusual day for layoffs. Big tech giants in the Bay Area are announcing layoffs that add up to thousands of workers being let go.
On Thursday, Bay Area-based Stripe, a fintech company, announced it will lay off 1,000 people.
On the same day, ride-hailing giant Lyft says it’s letting go of 700. Both companies say they’re cutting their workforce by 14 percent.
More companies are downsizing, saying it’s due to economic conditions, the market downturn, or restructuring.
“This is an unusual day. I’ve never seen so many layoffs announced on the same day before,” said Ted Egan, Chief Economist for the City and County of San Francisco.
And don’t forget about Twitter. Owner Elon Musk has announced plans to start slashing 3,700 jobs on Friday. That’s half the company’s headcount.
Since January, the San Francisco Standard has been tracking cutbacks with its “layoff tracker”
To date, 16,772 workers have been laid off at 138 companies.
Many of them happen to be tech companies.
“California is known for its tech industry. We’ve got to be careful. We don’t want to destroy our economy,” said economics professor Daniel Vencill at San Francisco State University.
ABC7 News asked him about the overall layoffs in the Bay Area and what led up to them.
“This is a deliberately created recession created by the Federal Reserve Bank. That is the only way we can end inflationary expectations. It’s just one of the tragedies of a monetary and fiscal policy. We have the tools, but it’s like using a shotgun to kill a mosquito. It’s too bad it’s the only tool in our arsenal,” said Professor Vencill.
Even though there are concerns about the economy slowing, new data this Thursday shows companies are still hiring – that there are two jobs for every worker.
Data shows that unemployment remains steady at 2 percent and that there are many of jobs out there.
“That’s because there are different sectors. Some firms may be hiring temporary work, for the holiday season,” said Professor Vencill.
“The reality is tech is a major driver of our region and our region’s economy and if you have thousands and thousands of layoffs, that will have ripple effects on other industries and unemployment will not stay at a record low,” said Chief Economist Egan.
Egan says September was the first month the San Francisco/San Mateo area lost tech jobs since the beginning of the pandemic.
Please note: This content carries a strict local market embargo. If you share the same market as the contributor of this article, you may not use it on any platform.