View the San Francisco for Wednesday, July 17, 2024
Checkr, a provider of employment-verification services headed by CEO Daniel Yanisse, announced in April plans to lay off 260 workers in San Francisco during one of the last big rounds of job cuts in The City.
When it comes to employment levels, San Francisco’s tech industry might not have reached rock bottom yet — but it could be getting closer. The combined tech workforce of San Francisco and San Mateo counties is now smaller than it was at the onset of the COVID-19 pandemic, and it has continued to shrink in recent months. Tech companies have done little hiring lately, and trends in the industry and in the economy at large could keep hiring depressed for the time being. But the number of people San Francisco’s tech and venture-backed companies have cut in mass layoffs has slowed in recent months. Venture investment, which often provides fuel for hiring at startups, has The public stock markets — where a selloff in late 2022 triggered a spate of layoffs in the sector — have more than rebounded from their lows then. And the Federal Reserve is widely expected to cut interest rates sometime in the next year, a move that could spark new hiring in the tech sector and beyond. “I think we’ve started to bottom out,” said Abby Raisz, the research director at the Bay Area Council Economic Institute, the business association’s in-house think tank. While the area has continued to see layoffs in the tech sector in recent months, those cuts are nothing like what it saw in 2022 and last year, Raisz said. “As an economic researcher, these are not numbers that make me go, ‘Oh my goodness, these are really bad,’” Raisz said. The San Francisco metro area saw a surge in tech employment in the long economic expansion that followed the Great Recession. The combined tech workforce of San Francisco and San Mateo counties swelled from 45,600 in January 2010 to 154,800 in March 2020, right as the pandemic hit the Bay Area, according to data from the state Employment Development Department. Industry employment shrank marginally in the next two months during the lockdowns, then surged amid the ensuing tech boom even as many other industries were shedding workers en masse. With many people confined to their homes, demand for tech-related products and services — including computers, streaming video and app-based grocery delivery — soared. Tech companies in San Francisco and elsewhere hired to meet that growing demand. By August 2022, tech industry employment in the two-country San Francisco metro area hit 184,800, according to EDD data. And then things started to turn. The stock market plunged. Inflation soared. And the Fed started to raise interest rates to cool the economy. In response, the tech industry announced massive layoffs, including 12,000 by Google parent Alphabet, more than 20,000 by Meta, and. At the same time, venture firms started to curtail their investments, forcing the startups they backed to conserve cash and cut their own workers. In the year ending June 30, 2023, San Francisco’s tech and venture-backed companies released a combined 8,032 people in mass-layoff events, according to EDD data analyzed by The Examiner. That was up from just 477 cuts in tech-sector mass layoffs, or those involving at least 50 workers statewide, in The City the prior year. And those cuts have kept on coming. In the year that just ended June 30, San Francisco’s tech and venture companies announced plans to let go 4,071 people in mass layoffs. By contrast, in the year ending June 30, 2019 — that last complete period before the pandemic — just 1,502 of The City’s tech workers were cut in mass layoffs.Those layoffs have been showing up in the EDD’s employment numbers. As of May, the number of people who work in tech in San Francisco and San Mateo counties combined was 150,300. That was down by 1,200 from April and at a level not seen since the summer of 2019. “We lost virtually all of our pandemic-era tech hiring,” said Ted Egan, San Francisco’s chief economist. “The glass is really empty.” While there’s little sign that the tech industry is about to embark on a hiring spree, there are indications that the worst of the cuts might be over. Since January, employment in the tech sector in the two-county region has fallen by about 5,000, according to EDD figures. That’s a lot, but the region lost 5,000 jobs in the sector from just December to January and more than 7,000 between June and September last year. Additionally, layoffs have started to abate. From the beginning of April until the end of June, tech companies in The City cut 672 workers in mass layoffs. That was well off the pace set in previous quarters over the last two years. And there’s reason to think the City’s tech industry could rebound in the coming year. Despite elevated interest rates, the national economy has remained strong and unemployment nationwide has stayed low. The stock market is up, reducing pressure on companies to cut costs and workers. Meanwhile, the venture industry is starting to see a resurgence. The amount that venture outfits invested in startups was up in the second quarter from the first, both in San Francisco and nationwide. That could bode well for hiring by such companies.“I think the outlook is good for the economy,” Egan said. He said interest-rate cuts “would be a shot in the arm for us.”Much of the rebound in the stock market is due to the outsized performance of a handful of giant companies, including Microsoft, Meta, Amazon and especially Nvidia. That could leave smaller public companies under pressure to improve their performance, including by cutting staff, said J.P. Allen, a professor in the School of Management at the University of San Francisco.. But instead of using that money to bulk up their workforces, those startups are using outsized portions of the money they’re raising to eitherto develop their AI models or to pay cloud-computing providers to run their models on those providers’ Nvidia-powered servers, Allen said. And as long as those AI companies are still trying to figure out a business model, they’re unlikely to do a lot of hiring, he said.More broadly, there’s still a lot of uncertainty in the economy right now, including when exactly the Fed might cut rates, and the presidential election and how its outcome could affect policies related to the economy, Raisz said. All of that is likely to keep a lid on hiring for the time being, she said. “A lot of firms tend to be pretty cautious in times of uncertainty,” Raisz said. “Right now, there’s too many unknowns for firms.”Student Gylli Palacio, 16, paints an enclosure during a construction class at John O’Connell Technical High School in San Francisco. Woodwork and auto-shop classes waned in popularity when most millennials were in high school, but shop class isn’t dead in San Francisco public schools. In fact, research shows that Generation Z students are more interested in skilled-labor trades than their predecessors. Current students and recent high-school graduates are flocking to vocational schools more than their predecessors, so much so that Generation Z has been“I’m really interested in art as a hobby, in creating things, so construction really caught my eye,” said Gylli Palacio, a rising junior at John O’Connell Technical High School who told The Examiner she is interested in exploring a career in construction. “I love working with my hands.”at two-year institutions increased 8.1%, 7.7%, and 14.2%, respectively, from spring 2023 to 2024, according to estimates from the National Student Clearinghouse Research Center. San Francisco public-school students have opportunities to explore those trades through various school-year programs and summer internships, and local teachers here have noticed interest grow over the years. The career pathways offered at John O’Connell Technical High School, for instance, include entrepreneurship and culinary arts, and construction and environmental technology. The school is also offering a summer internship in which 15 students gain hands-on experience while earning college credit and $600 stipends — as well as the priceless ability to say they created something from scratch. Students learn the basics — such as how to identify and properly use tools in a framer’s toolkit, measure and cut two-by-fours, and apply roofing materials, among other skills. They then put those skills to work in building structures such as tiny homes and sheds. Palacio on Friday added a fresh coat of paint to a wooden structure that will shelter recycling, compost and trash bins on a San Francisco Unified School District campus. The internship will wrap up July 19, and the sheds will be placed on school sites next academic year.Chris Wood , a Construction Class Instructor with student Jefferson Fraga, 18, working with a caulk gun at John O’Connell Technical High School in San Francisco on Friday, July 12, 2024. Chris Wood, who has taught construction courses at the high school for more than 12 years, said more students are coming into his classes who are “genuinely interested” in a career in construction. The construction pathway serves as a direct entry into Local 22, the San Francisco carpenters union, and those union jobs “offer great pay and benefits,” Wood said. “The students are all curious about how much you can make — and are all impressed with union-scale pay in San Francisco, certainly,” he said.— continues to see an unprecedented demand for skilled employees. Current job trends indicate that construction jobs and other skilled-labor jobs are more secure, while non-labor industries face unprecedented layoffs. AsEstee Cohen, founder of the independent recruiting firm California Job Shop, told The Examiner that skilled-labor jobs “will always be in demand.” “Construction is always growing. There’s always something to build,” she said. “And if you’re looking for a trade that’s not going to be replaced with a computer, construction is it.” That increases the value of vocational education, Cohen said, as well as technical career pathways in high school. “We used to encourage kids, 10 years ago, to become engineers,” she said. “Everybody became an engineer, and now they’re being laid off in masses.” But the demand for craftsmen and trades workers is palpable locally. Nick Rothman, chair of the trade skills department at City College of San Francisco, said he gets emails from employers “every day” looking for graduates. “My colleagues in post-secondary education are just kind of blown away by that,” he said. “They say, ‘Wait, the recruiters come to your campus?’ That’s just not as common .”Students Raymond Tavake , 17, and Steven Escobar Aguirre, 16, paint an enclosure during a construction class at John O’Connell Technical High School. The school’s summer internship program offers students college credit, a stipend and hands-on experience. Wood said that some of his students will go on to careers in construction, but not all. Many still go on to pursue bachelor’s degrees in the sciences or liberal arts, he said — “and we, of course, encourage that.” Cohen said there is value in taking shop class, whether it be an auto mechanics course at George Washington High School or a construction internship at John O’Connell, regardless of career path. Hard labor skills learned there are applicable in the real world, she said.While Gen Z’s growing interest in labor work is undeniable, Wood said, he couldn’t say for sure why students are more interested in construction than before. He said it’s most likely because outreach to middle-school students has increased over the years. When middle-school students attend an open house at the high school, he said, “they get to use a hammer; they get to paint something.” In other words, they get the rare opportunity to work with their hands — and power tools and paint rollers — rather than pens and paper. For students for whom learning and studying are mainly done while stationary at desks, it’s a novelty and an opportunity to explore alternatives in higher education. “They don’t get that kind of tangible learning opportunity in history or math class that you would in a ,” Wood said.Click and hold your mouse button on the page to select the area you wish to save or print. You can click and drag the clipping box to move it or click and drag in the bottom right corner to resize it. When you're happy with your selection, click the checkmark icon next to the clipping area to continue.This is the name that will be displayed next to your photo for comments, blog posts, and more. 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