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June 3, 2023

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Silicon Valley tech layoffs: Why so many jobs were slashed, and who’s hiring amid fierce competition?

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Joy Serqui??a, of San Jose, a software engineer who lost her job at a startup in November, at a coffee shop in downtown San Jose, Calif., on Feb. 9, 2023.  Serqui??a is currently looking for a new job.
Joy Serqui??a, of San Jose, a software engineer who lost her job at a startup in November, at a coffee shop in downtown San Jose, Calif., on Feb. 9, 2023. Serqui??a is currently looking for a new job. (Dai Sugano/Bay Area News Group/TNS) Photo Gallery

A growing barrage of technology industry layoffs means slim pickings for job-seeking software engineers and other tech workers amid a fiercely competitive Bay Area job market that has tipped from bountiful to brutal.

Tech sector job postings have plummeted across the region. In the San Jose metropolitan area, including Santa Clara and Sunnyvale, listings for software-related positions have nose-dived 45% since just before the pandemic, and information technology postings have dropped 37%, according to data from employment marketplace company ZipRecruiter. In the metro area encompassing San Francisco, Oakland and Fremont, software job listings plunged 53% and IT postings dropped 28%.

“It’s a little overwhelming,” said San Jose software engineer Joy Serquiña, who lost her job at a startup in November and has been searching, along with hordes of others, for a new position. “It’s a constant grind. Applying is kind of like a full-time job.”

Serquiña knows she’s competing for positions against engineers with Big Five companies like Google on their resumés and fears losing out to them. Still, there are opportunities: Serquiña is encountering companies looking for more specific skills, so she’s taking online courses and learning new technologies to broaden her employability.

Her job quest highlights the challenges and strategies for job seekers in an industry contracting after a decade of explosive growth. Just before the COVID pandemic hit, Google’s parent company Alphabet had 119,000 full-time employees. As public health orders and fears of the deadly virus drove people out of the physical world and into online life and shopping, the digital-advertising giant’s workforce ballooned — to 190,000 by the end of last year. Then last month the company axed 12,000 workers, including 1,600 in the Bay Area.

Many other Bay Area firms, including Facebook’s parent company Meta of Menlo Park, Santa Clara computer chip maker Intel, San Jose video-conferencing company Zoom and San Jose payments platform PayPal also staffed up heavily during the pandemic before slashing jobs in recent months. The carnage has just topped 20,000 newly or soon-to-be unemployed workers since mid-2022.

The job losses grew from converging factors affecting tech companies’ revenue, profits, funding and shareholders. Rising interest rates pulled cash away from tech and into higher-return investments, and squeezed companies’ risk-taking. Life and commerce returned to pre-pandemic patterns. Digital advertising declined, a strong U.S. dollar hurt exports, and inflation and recession worries boosted costs and cut consumer spending. Tech stock prices cratered.

Although hiring has slowed, it hasn’t stopped, and certain industries, mid-sized companies and later-stage startups are still bringing on new workers, said Roland Luk, a careers manager at UC Berkeley’s Haas business school.

It took Stephen Lynch four months to find a new position after being laid off from a communications position at financial-services software company Stripe in November. “I’ve never been out of a job for this long in my life,” said Lynch, 40, of San Francisco. “I started broadening my search: different industries, different types of roles, different ways to do contracting or consulting work to just fill in,” he said. Last week, Lynch started in a communications role at Chronosphere, a business software startup.

And even major companies that have dumped employees en masse are looking for new ones. Meta has nearly 800 job openings, almost half Bay Area-based and about 300 related to its virtual- and augmented-reality technologies. Google lists more than 1,000 openings, the vast majority in engineering and technology units, many in the Bay Area.

“They have shifting strategies, and they always need to align resources to their new strategies,” Luk said.

For all the difficulties, the average newly jobless American tech worker takes seven weeks to get re-employed, two weeks less than for employees in other industries, according to a survey by ZipRecruiter.

Julia Pollak, ZipRecruiter’s chief economist, said Russia’s invasion of Ukraine has boosted tech job opportunities in the defense sector, as U.S. companies supply weapons to Ukraine and to its neighbors concerned about Russian aggression.

“If you’re getting laid off from Facebook or Google you might consider going to Lockheed Martin,” Pollak said. The aerospace giant, which produces rocket systems heavily used by Ukrainian forces, is looking to fill more than 200 tech positions based in Sunnyvale or with the option of a Sunnyvale location. And some of the stigma of working in the arms business — an industry that fueled the rise of Silicon Valley decades ago — has been erased by Russia’s ruthless conduct, said Steve Blank, a Stanford University professor of management science and engineering.

Among emerging technology ventures, chat software — with the suddenly ubiquitous ChatGPT by San Francisco’s OpenAI at the forefront — is expected to propel large numbers of startups. Venture capitalist Shawn Carolan sees applications for sophisticated chatbots that can provide comprehensive responses to questions and prompts from consumers, businesses and students. “We think there’s going to be a whole crop of companies that come up,” said Carolan, a partner at Menlo Ventures in Menlo Park.

Many startups that have secured funding, and especially if they’re gaining customers, are adding employees, said Luk, from UC Berkeley. “You need to be showing investors what you are spending that money on,” he said.

Pleasanton technical writer Brian Immel, laid off from his documentation engineer position at Meta in November, is leaning toward startups, and not only because many are hiring. “They tend to be more hectic, more chaotic,” said Immel, 51. “But that just gives you more opportunity to prove yourself and make more impact.”

Seeking work in today’s conditions has been all-consuming, Immel said. He has applied for 94 positions since his layoff, while taking online courses in the artificial intelligence specialty of machine learning to increase his employability. He said he’s reached the interview stage with 47 companies but finds employers are casting a wide initial net and “somewhere between the recruiter and the hiring manager” most of his applications have stalled. He remains in the interview process at four companies.

“I’m actively staying away from the big companies because I know they’re not done with the blood-shedding,” Immel said.

Engineering manager Nitesh Donti landed at biotech software startup Benchling this week, nearly three months after he was laid off from robot-vehicle company Nuro. Some companies announced layoffs while he was pursuing a job with them, said Donti, 30, of San Francisco. “It was a very interesting time to apply because you don’t know what’s going on anywhere,” he said.

Laid-off workers are also finding opportunities outside the tech industry, as companies, schools, government agencies and other employers build their digital presence on apps and websites, Pollak said.

Blank, a former entrepreneur who watched Silicon Valley bounce back from the dot-com bust and the financial crisis, sees a renewed financial discipline and new technologies putting the region’s tech industry at a pivotal point.

“I think this is the finest time ever for tech people, they just don’t know it yet,” Blank said. “It never feels like it if you’ve lost your job and you’re looking at the rubble on the ground. But something else emerges. We’ve seen this movie before. We come out stronger.”