Evan Richardson grew up in Silicon Valley, surrounded by big tech companies that transformed how people live, socialize and work.
As a curious kid, Richardson took apart electronics and put them back together. A career in technology seemed like a natural and safe path after his service in the military.
“Tech was always an industry you go into, you’re going to make a lot of money and you’re never going to get fired,” he said.
For thousands of tech workers like Richardson, those days are over. In March, the 43-year-old Hayward resident was caught off guard when he learned his employer, payment company Square, was eliminating his role as a development and operations engineer because of a reorganization.
Square’s parent company, Oakland-based Block, planned to shed 931 jobs, or 8% of its workforce, citing performance issues and the need to create a more streamlined operation.
In California, the cuts will begin next month and affect 240 employees, including engineers, designers and writers, according to a notice sent to the state’s Employment Development Department.
Block is among major San Francisco Bay Area tech companies slashing their payrolls this year. Meta, Google, Autodesk, Workday and others also announced job cuts. Intel is planning to cut more than 20% of its workforce, Bloomberg reported. On Thursday, the Santa Clara-based chipmaker confirmed it would be laying off workers to “drive better, more efficient execution across the business.”
“I’m a big believer in the philosophy that the best leaders get the most done with the fewest people,” Intel Chief Executive Lip-Bu Tan told employees in an email. The company lost $821 million in the first quarter.
In a region known for boom and bust cycles, these tech industry layoffs are delivering a blow to a sector that is vital to California’s economy, recently ranked as the world’s fourth-largest.
In addition to supporting high salary jobs, tech companies offer employees stock options, so the state benefits from taxing capital gains, the profit earned when the shareholder sells their stock for a higher price.
“When cuts are happening in Silicon Valley, traditionally it’s affected everything from wages and taxes to even state revenues,” said Kevin Klowden, executive director at the Milken Institute, an economic think tank in Santa Monica.
The numbers are bleak, though not as bad as in 2023, when layoffs surged. U.S. tech companies announced 37,097 job cuts from January to March, down 13% from the same period last year, according to a report from Challenger, Gray & Christmas, a firm that offers job search and career transition coaching. In 2023, tech companies announced 102,391 cuts during the first three months of that year.
In California, companies in the first quarter of this year announced 17,874 cuts in technology, which includes businesses mainly engaged in the development of software or manufacturing of computer hardware, according to Challenger, Gray & Christmas. The firm gathers data from news reports, company filings, annual reports, news releases and layoff notices.
Overhiring during the pandemic, when more people turned to online shopping, videoconferencing and social media, fueled much of the layoffs in recent years, experts say.
“A lot of these tech companies that hired to the moon are falling back down to Earth,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas.
But other factors are driving the latest round of layoffs, economists say. They say that companies are measuring people’s productivity and performance more closely, and that they are shifting resources toward artificial intelligence investments.
Economic uncertainty prompted by regulatory changes such as tariffs and shifts in immigration policies are also driving businesses to rein in costs.
“There’s just a general unease about the economy, particularly over the last several months. We’ve seen a slowdown in hiring really across the board,” said Dante DeAntonio, senior director of economic research at Moody’s Analytics.
For tech workers reeling from all the job losses, the industry feels far less stable.Technology evolves rapidly, and so can a company’s priorities. One day you’re in, the next day you’re out.
Though some are weighing whether they want to stay in tech, others find it tough to let go of the high salaries, benefits and perks.
Maria Jose Calero was laid off from Autodesk after six years at the San Francisco company, where she worked as a program manager and business partner.
Autodesk, which makes software used by architects, designers and engineers, announced in February it will cut 1,350 positions, or roughly 9% of its workforce. It cited geopolitical and macroeconomic factors along with its efforts to invest more heavily in AI, a regulatory filing said.
Those reasons were little consolation for Calero. The 36-year-old San Francisco resident said the tech industry offered stability and opportunities to grow her career.
She is considering jobs in other industries, including healthcare and hospitality, but isn’t sure they will pay enough to cover her bills, a mortgage and for her daughter’s day care.
“Tech is hard to walk away from,” she said. “It’s like golden handcuffs because where do you find a salary that matches what you had?”
With major companies such as Meta saying they’re targeting low performers, unemployed workers have pushed back against the claims on social media.
Among them is Adam Espinoza, who recently lost his job as a software engineer at Meta. In February the social network started cutting about 5% of its workforce, or roughly 3,600 employees, the latest in a series of job reductions in recent years.
Espinoza said he met all expectations and was even talking to his manager about a promotion when he was told he would be let go.
“That also indicates to me that I shouldn’t have been on the chopping block, but here I was,” the 28-year-old said.
Like other workers, Espinoza said, he’s seen a culture shift within tech companies, which have moved away from efforts to promote diversity.
At Meta, he said it felt like if you didn’t consistently exceed expectations as an engineer, you could get replaced by artificial intelligence or the company could hire someone new for lower pay or less compensation.
Still, Espinoza has no intention of leaving the industry. He grew up in Rosemead in the era of dial-up internet and AOL and was drawn to how engineers solved problems. His career in tech eventually brought him to San Francisco.
“I’m planning on staying in the tech industry for now. It is definitely something that I love doing,” he said.
Chase Foti-Landis, who was laid off from his job at software company Zendesk, is still processing what happened.
The San Francisco-based company said in February that it was laying off 51 employees in California, according to a notice filed with the state. The cuts included senior managers, the vice president of product and principal managers.
Though layoffs had happened in the company before, Foti-Landis said his team was already lean, so losing his security analyst job came as a “total surprise.” Zendesk had slashed 8% of its workforce in 2023.
“I was made to think that it could never happen to me,” he said.
Foti-Landis, 31, who worked at Zendesk for more than four years, pivoted into tech after working as a sales associate and a teacher.
Pondering his next career move, he’s thought about whether he should work outdoors as a park ranger.
“So many times you’d just be working at a desk or working on the computer,” he said, “and you look outside, and you’re just like, ‘God, it’s gorgeous outside.’”
The post Bay Area tech workers thought their jobs were safe. Then the ‘golden handcuffs’ came off appeared first on Los Angeles Times.
