Bay Area Tech Layoffs.

The Bay Area is a big ole breeding ground for the tech industry, being home to 7,894 scale up tech companies. A scale up means a tech company that’s raised more than 1 million dollars since its inception. More than the quantity of companies located here, it's undeniable that the Bay is home to some of the biggest players, such as Meta and Google.

This last week Google announced it was parting ways with 12,000 employees, that’s 6% of its current workforce. Alphabet, Microsoft, and Amazon have all let go of 40,000 employees combined in recent weeks. Its estimated right now the total of all reported tech company layoffs are around 200, 000 people who have lost their jobs here in the start of 2023.

Because of the large number of folks who have become recently unemployed in that industry, there is a lot of current buzz around what this might mean for an already “cooling” Bay Area housing market.

We at the Monday Team would like to take a moment to point out some very relevant numbers, to reassure you these layoffs are not indicative of any wave of real estate doom.

The bottom line to consider here is that the tech industry and home values in the Bay Area were both subject to the same artificial inflation that skyrocketed their values in 2020 and 2021. What we are seeing in these lay off trends and the chilling out of a fiery hot housing market, is the wind letting out of the sales after the storm. Pandemic shot the value of Bay Areas homes, and the need for online workers due to an internet heavy lifestyle in the U.S during those deep Covid years, through the roof just due to the incredible increase in demand during that specific time. Everything was done online, and everyone had to stay home, hence the need for those two areas got crazy high, with no gradual gear up.

Microsoft hired 40,000 new staff members, for example, between June 2021 and the same month of the following year. Considering the big bump up in staff numbers, even after their current layoffs they are still up nearly 30,000 people, since the pandemic hiring boom. Meta hired 20,000 people 2020 through 2021 and recently cut 11,000 jobs.

Right alongside the tech industry Bay Area homes saw a 25 to 30 percent value increase in the last two years, with a historically low interest rate. Let’s just consider why homes appreciated so much so fast, what has happened now, is the same in both arenas. The demand has gone down from spiking crazy high, to a little more normal. There is nothing “bad” happening to either tech industry or home values. If you really look at the numbers they have both sustained stable growth.

It just gets easy to lose track of the base line when things swing around so dramatically,  Covid blew our sense of normalcy out of the water. We can all be reassured when we look at where we started before the pandemic artificially inflated both home values and tech industry value, they are both moving at a healthy rate. Just as babies learn to walk before they run, everything is most sustainable when the gradual steps of development are taken.