Deeper job cuts in Santa Clara and Sacramento officially announced by Intel this week capped six months of thousands of tech layoffs in the county and the Bay Area.
Even as reports filed by regional employers with the state showed significant cuts in other business sectors – such as the decision by Gallo to close its California sales operations and move to Texas – regional unemployment dropped again to near historic lows, according to the state. Overall, regional and statewide job growth continued in December, the latest reporting month.
Intel announced Thursday it would be laying off 201 staff at its headquarters in Santa Clara, to be completed by the end of the month, but Worker Adjustment and Retraining (WARN) Notifications filed by Intel with the California Employment Development Department (EDD) revealed deeper cuts: The company told the state it intends to lay off 478 workers in Santa Clara County and 343 jobs at its office in Folsom by the end of March.
WARN reports filed in the last six months through Jan. 25 showed 3,384 permanent layoffs among tech employers in Santa Clara County, and a total of 8,765 permanent tech layoffs statewide since August. The layoffs sent shock waves across Silicon Valley.
“Despite historical boom and bust cycles, many technology companies have been in constant growth mode since the end of the great recession, so it is somewhat of a rude awakening for the Silicon Valley tech community,” said Kim Crosslin, Wells Fargo Silicon Valley Tech Banking Leader, told San Jose Inside. “Now many tech vendors and support professionals are weighing how force reductions may impact their bottom line and growth plans. The time is now to make necessary capital expenditure adjustments.”
More than 22% of the 1,195,800 workers in the Santa Clara/San Benito County metropolitan statistical area (MSA) are employed by technology companies, according to federal labor statistics.
Unemployment rate drops
The unemployment rate in the local MSA was 2.1% in December, down from a revised 2.4% in November, and below the year-ago estimate of 2.9%, according to the latest figures released a week ago by EDD.
This compares with an unadjusted unemployment rate of 3.7% for California and 3.3% for the U.S. in December. In January 2021, the two-county unemployment rate was just over 6%.
Last fall, Intel announced thousands of job cuts across the company, citing the need to cut costs and cope with slowing sales of personal computers that use its semiconductors and microchips. The company had about 121,000 employees worldwide last autumn.
Intel warned last year that its 2022 sales would be about $11 billion lower than previously forecast.
Earlier this week, Microsoft announced that it is cutting 10,000 jobs, and Amazon recently announced the elimination of 18,000 positions companywide.
EDD reported that the “information” sector in California, mostly tech employers, had a net gain of 2,200 jobs in the state in December. This growth was duplicated in the trade,transportation and utilities sector, which reported seasonal gains of 1,400 jobs. This includes 900 net job growth in retail and 600 net jobs in wholesale trade. Construction and manufacturing also reported job growth in December, both adding 700 more jobs than November.
In the 12 months between December 2021 and December 2022, Santa Clara and San Benito added 47,100 jobs, a 4.1% increase. Of these, professional and business services employers led the way, with 12,200 new jobs, while professional, scientific and technical services added 11,500.
Other notable job growth occurred in private educational and health services (9,800 jobs), leisure and hospitality (8,600, mostly in restaurants and bars) and information (up 6,800 jobs)
Major employers report job cuts
The came as thousands of jobs were cut by major employers
- Google told the state it will be cutting 678 permanent jobs at its Mountain View campus by the end of March.
- The Sunnyvale campus of Meta, parent company of Facebook, cut 237 jobs earlier this month, along with 2,134 permanent job cuts in Menlo Park and 144 in Fremont, according to the WARN notices.
- Cisco Systems will cut 593 positions in San Jose and Milpitas and another 80 positions in San Francisco through March.
- Twitter job cuts reported early this month totaled 106 in San Jose, and 784 in San Francisco.
- Amazon, Microsoft, Oracle Cepheid, PayPal, 8x8,Argo AI and Scale AI also reported hundreds of layoffs in the last few months.
- Two tech firms – Spartronics in Milpitas with 74 jobs and Kittyhawk with 100 jobs in Palo Alto and Mountain View – told EDD they were closing operations.
Tech companies in California filed WARN notices totalling 8,765 job cuts. Firms are required to give notice of layoffs 60 days before the termination dates.
Scattered layoffs in other business sectors reported to the state showed the continued volatility of the economy, despite continued job growth and low unemployment.
- The Gallo decision to move its sales operations to Texas will cost 355 California jobs.
- Specialized Bicycle in Morgan Hill laid off 80 employees in mid January.
- Los Altos-based Bon Appetit, whose food service includes the Google campus, will eliminate 45 positions by the end of March.
- Blue Shield cut 296 positions across the state this week.
- American Airlines will complete layoffs of 417 jobs by the end of this month, according to the WARN filings.
- Last fall, Owens Corning eliminated 225 permanent positions at its Santa Clara facility, and Tesla in August cut 229 jobs in San Mateo and 69 in Fremont, as part of its company wide restructuring.