Job growth in the tech industry used to zoom like a race car, but these days, hiring by this principal driver of the Bay Area’s economy chugs along more like a family SUV.
The technology industry’s job growth in the nine-county region has dramatically decelerated, according to this newspaper’s analysis of figures released by state labor officials and Beacon Economics. Tech’s annual job growth throttled back to 3.5 percent, or 26,700 new jobs, in 2016. That’s much slower than the 6 percent annual gain of 42,300 jobs in 2015, or the 6.4 percent gain in 2014.
And while the industry’s 3.5 percent growth last year is still a sturdy annual pace, Bay Area technology companies have already disclosed plans to slash about 2,000 jobs in the first three months of 2017.
“You have growth and you have layoffs at the same time in tech,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “You have layoffs because there are several companies trying to make the same products or services. Not all will succeed; some will fail.”
Even so, job growth in technology companies last year far outpaced total job growth of 2.6 percent across all industries in the Bay Area. That indicates the tech sector remains a major engine of the region’s economy.
“Tech will continue to outperform the overall job market over time, even as it goes through structural changes,” said Scott Anderson, chief economist with San Francisco-based Bank of the West.
Layoffs scheduled for the first quarter are occurring at some of the Bay Area’s largest tech companies, along with numerous smaller firms and green energy companies, according to a review of layoff announcements filed with state officials, also known as Worker Adjustment and Retraining Notification, or WARN, notices.
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