Silicon Valley suffers big job losses in 2020
SAN JOSE >> Silicon Valley suffered mammoth job losses during 2020 that affected nearly every industry except the tech sector, whose employers managed small job gains despite coronavirus-linked economic woes, a report released Tuesday shows.
The job losses in Silicon Valley were so severe that they exceeded the employment setbacks in the region during the dot-com debacle, according to the new report by Joint Venture Silicon Valley, a San Josebased think tank.
Yet while overall job losses in Silicon Valley — defined as Santa Clara County, San Mateo County, southern Alameda County, and northern Santa Cruz County — were dramatic, some industries were hit far harder than others, and some managed to actually gain jobs, such as tech, according to the report.
“We have a tale of two economies and a tale of two recoveries,” Russell Hancock, president of Joint Venture Silicon Valley, said during a news briefing to discuss the report.
Over the one-year period that ended in June 2020, overall employment in the Silicon Valley geographic region fell by 8.9%.
However, community infrastructure and services jobs — an economic term to describe jobs in retail, food services, hotels, arts, entertainment, transportation, and personal services — suffered a decline of 15.4%.
“This has wiped out the service sector and the inperson economy,” Hancock said. “There is real carnage out there.”
In sharp contrast, tech companies, consisting of innovation, information products, information services, and computer hardware, increased their job totals in Silicon Valley by 1.8%.
“The tech sector didn’t miss a beat,” Hancock said. “During the pandemic, demand for Silicon Valley services skyrocketed.”
People who began to increasingly work from home quickly embraced remote conference services and systems such as those fashioned and offered by San Jose-based Zoom.
The largest Silicon Valley tech companies continued to add jobs, but at a slower pace than was the case in the rest of the United States and the world. The 15 largest tech companies increased their staffing levels by 3.7%.
But the Bay Area’s share of those jobs fell because other regions were growing even more quickly.
“We are increasing our numbers of tech jobs here, but we are losing some share of those jobs” worldwide and nationwide, said Rachel Massaro, director of research for the Silicon Valley Institute for Regional Studies.
The 15 largest tech companies based in Silicon Valley had 28% of their U.S. workforce located in the Bay Area during 2018, but that share dropped to 26% in 2019, and to 24% in 2020, according to the report. Globally, the largest Silicon Valley tech companies had 16% of their worldwide workforce located in the
Bay Area during 2018, 14% in 2019, and 12% in 2020.
Still, the size of the Bay Area tech sector dwarfs other regions, the report determined.
At the end of 2019, the most recent year surveyed by Joint Venture Silicon Valley, the Bay Area accounted for about 379,700 tech jobs. The next largest region for tech employment, the Washington D.C. metro region, had about 263,700 tech jobs.
In contrast to the strong showing of the tech sector, the experience of the hotel industry is decidely bleak and threatens the health of the budgets of city government agencies.
“Silicon Valley city revenues are expected to decline by an average of 5% due primarily to the effects of the pandemic, with the most dramatic declines expected in transient occupancy taxes,” the report stated.
Transit occupancy taxes are expected to decline by an average of 38% and produce an aggregate loss of more than $100 million regionally for local government agencies that levy these taxes, according to the report.
Despite the currently grim landscape for certain segments of the economy, Joint Venture Silicon Valley believes a rebound could be swift — although Hancock didn’t provide a time frame for when the rebound might start.
“The economy will recover very quickly,” Hancock said. “The economy will come roaring back.”
Contact George Avalos at 408-859-5167.