The WARN filings, by company.
By Wolf Richter for WOLF STREET.
There have been a gazillion layoff announcements by companies headquartered in San Francisco and in Silicon Valley, and there are websites that track those announcements as they’re published in the media, and folks throw around big numbers, such as 200,000 tech layoffs, etc.
In reality, most of these companies are global companies with facilities around the US and around the globe, and the layoffs are global, and many people who got laid off in the US are working from home, and even if their office was theoretically in San Francisco, they might have been living in another state for all we know, and economically, that layoff impacts the local economy in that state.
So how many people actually got laid off between July 1 and now, in San Francisco and in Silicon Valley? We can get the numbers by looking at the WARN (Worker Adjustment and Retraining Notification) reports. The California WARN Act requires employers with 75 employees or more to give advance notice to employees affected by plant closings and mass layoffs. With enough severance pay, employers can lay off employees with immediate effect, but they still have to report those layoffs to WARN.
What’s astonishing, after six months of layoff hoopla in the media, is how relatively few people actually got laid off from July 1, 2022, through January 18, 2023 (the most recent available), in the three counties that cover San Francisco and Silicon Valley.
There are currently 2.4 million employed workers in the three counties combined, according to the California Employment Development Department; and the total layoffs since July 1 amount to 15,362 people, or 0.6% of all remaining employed workers. Actual layoffs by county, based on WARN filings:
- San Francisco County: 6,248
- San Mateo County: 4,052
- Santa Clara Country: 5,062.
“Tech,” social media, and biotech companies feature prominently on the lists, including Twitter, Salesforce, Meta, Invitae (biotech), Cisco, and Jabil. But other companies made it to the top of the lists too, such as American Airlines which is closing its flight-attendant base at the San Francisco Airport, electronic cigarette maker Juul, contractors that service Meta buildings, and Tesla which closed its office in San Meteo.
Here are the layoffs in the three counties over the past six-months, based on WARN reports. A reminder: just because a laid-off worker was listed as being laid off from the Twitter or Meta office in San Francisco doesn’t mean that the worker actually lived in San Francisco.
|San Francisco County||Notice Date||# of people|
|San Francisco Housing Authority||07/29/2022||146|
|Bayview Hunters Point||08/01/2022||82|
|Chinese Community Health Care Association||10/31/2022||68|
|PSA Risk Management Services||08/31/2022||40|
|Heritage on the Marina||01/04/2023||17|
|San Mateo County||Notice Date||# of people|
|ABM Industry Groups dba Meta||07/01/2022||368|
|Flagship Facility Services at Meta||01/03/2023||126|
|Verily Life Sciences||01/11/2023||119|
|Thermo Fisher Scientific||11/15/2022||49|
|Santa Clara County||Notice Date||# of people|
|Kitty Hawk Corporation||09/21/2022||100|
|Specialized Bicycle Components||01/11/2023||80|
|Aerotek at Flex LTD||11/11/2022||48|
|PSA Risk Management Services||08/31/2022||44|
|USRA at ARC||09/09/2022||41|
|Bed Bath & Beyond||12/01/2022||36|
|Silicon Valley TMS||11/15/2022||30|
|Sierra Monitor Corporation||09/07/2022||26|
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“The California WARN Act requires employers with 75 employees or more to give advance notice to employees affected by plant closings and mass layoffs.”
Wolf, what are your thoughts about the number contractors who do not get the WARN notice? Case in point, Twitter had about 5k contractors, many of whom were let go and also worked in SF. There are some legitimate videos and posts by those contractors on LinkedIn and elsewhere. Facebook also laid off 450 contractors who were doing content moderation, so this shows the extent of domino effects.
Many Googlers were notorious for spending all day in meetings while snacking on food and drinking lattes, and many contractors were working hard to support those employees’ lifestyle. They used to call the practice “rest and vest” at Google.
That’s the thing with contractors. These people are essentially self-employed. If you’re self-employed, you have to hustle to keep the gig you have or line up the next gig. Uber drivers are contractors too. My understanding is that many of the Twitter contractors were in India.
I can see what you’re saying, that the contractors were actually working (because they wanted to keep the gig), and that the employees were a little lax (because they felt secure, invincible, and invulnerable). I’m not sure how much that was the case, and I doubt a lot of this stuff on the internet, but it wouldn’t surprise me if there was some of it.
“you have to hustle to keep the gig you have or line up the next gig.”
Where I worked in one of the three dig Intel/DoD agencies, they outsourced all the IT work to contractors. They had us govees train the contractors who were basically taking over our jobs. After promising the moon, when they got the contract, they had to hire 10 contractors to do the work of 1 dedicated govee worker.
Not only that, they trashed the whole IT infrastructure and spent most of their time on smoke breaks and other non-productive activities, including looking for a step up job. When I performed a safety inspection, I found 89 safety and security violations in their workplace area including cots in their office space where they took frequent sleeping breaks. I could go on.
So, excuse me for not feeling sorry for these losers when they get laid off.
I have a not-immediate-family relative who was an IT manager for the State of Texas. He said they let go a lot of his guys and he spent months and months training the IBM replacements.
In the end, a total mess. IBM still got paid but the State of Texas was left with nothing for it.
This is not uncommon.
Sometimes it’s the fault of the company that hires the contractors for failing to do due diligence (because it’s business! And maybe the contract company doesn’t care whether it gets another contract from you.).
In the late 1990’s, very early in my career, I worked on a chip design team. Management brought in a bunch of contractors to help design and test the chip, but no one thought it necessary to interview the contractors that were provided by a “contracting company” I won’t name.
So how did it work? The first two guys that came in were good. The very first guy was great!
The rest, who came on in dribs and drabs thereafter, were terrible. The contracting company KNEW this. They spent a lot of man hours hiding the incompetence of the people my company was paying.
Most employees and contractors are diligent and do their jobs well.
But, there is definitely “some of it”. I once needed to track down a DBA in a large office building and asked my colleagues if they knew where he was located.
“Go down that hall and turn left when you get to ‘Facebook and Twitter’…”.
I knew exactly what she meant and proceeded directly to the DBA’s desk.
Most contractors are not self-employed, but are “vendor workers” of one of the various agencies. My group at Apple was approx 90% “vendor workers” from at least six different agencies. I’m guessing that is why Apple, Google/Alphabet, Microsoft do not appear on these lists. Vendor workers are often W2 employees of the agency with the caveat that you get paid only while on a paying assignment. If an assignment ends, you are technically not “laid off” you just stop getting paid. Therefore agencies do not trigger the layoff reporting requirements. A carefully constructed arrangement to disguise the boom and bust cycles.
I second that, and the ratio of employee/temp employee could be 50/50 by my rough estimate.
1. Yes, if the contractor is employed (W-2) by a company that has a deal with Google, and the company loses its contract with Google and lays off its employees that worked on a Google project, these people will show up in the WARN report under their company’s name, not under Google.
2. Google will appear on this list in a little while. They just announced the layoffs on Friday. If they have already decided exactly who they will let go, they will report that to WARN by about now. WARN will then process this, and it will show up on the list in a few days.
3. Microsoft may not yet have laid off anyone yet from their Silicon Valley campus.
I’m going to do something like a monthly update on this, while it’s important to see what’s going on. Maybe also for all of California, top 50 layoffs, etc. And we will see Google on those lists.
W2 contractors still get paid when they’re on the bench. It’s the 1099s that don’t. Usually the W2 employees won’t get laid off though, they’ll just get reassigned to other work. If they do get laid off, there’ll be a lag as the company tries to assign them to new work.
I think John brought up contractors because they wouldn’t be listed under the WARN filings. And as Ross mentions, a lot of these guys from agencies technically stay “hired” but don’t get paid, or get paid very minimal while waiting for their next gig.
I’ve been friends with contractors before, and when they’re between jobs, they’re technically not unemployed but usually sweating bullets because if they don’t get assigned new work in X months (usually 3-6) they would get let go by the agency.
Bottomline is that the WARN filings may understate the number of layoffs, since I don’t think it captures what’s going on with contractors, especially this early in the contraction cycle.
Also wanted to add that at this stage, you’re probably right that layoffs are not a big thing in the Bay Area economy (yet). Probably the biggest drag on the economy is the reverse wealth effect.
Techies who relied on expectations of stock options vesting into millions of dollars and therefore spent based on that wealth effect, are now curtailing spending and going into cash conservation mode as their options become worthless. A Bay Area economy that survives strictly on wages from corporate cash flow with nothing from stock market capital gains (which represent investors from all around the world pouring money into Bay Area coffers) is a much smaller economy than the Bay Area is used to.
As a 15y Googler (retired last March), there is some truth to the “rest and vest” thought but not that much truth. Even senior engineers get a “not acceptable” rating on their semi-annual Perf review if they aren’t working, followed by a PIP and layoff six months later if things don’t improve. It isn’t perfect but it works reasonably well.
Some senior engineers may not work as hard as the new-hires but they generally accomplish twice as much just because of their familiarity and experience. That doesn’t give them a pass, however.
How do I know? I was one of them. I’d lost my “hunger” for the work and they knew it. It’s why I decided it was a good time to leave while were still on good terms.
Also, I never met a single contractor inside Google engineering; we were all full-time employees of Google.
Interesting. I worked on a Google X project for around 3 years, and 50+% of the group(200 total)were contractors. They cancelled this project and fired everyone involved after 9 years. Everyday robot project if anyone is interested. Google X is a bit different, but all of our senior engineers were full time employees.
Contractors are favored by employers because they’re easy to lay off. They typically have specialized skills, but lack company “tribal knowledge” – the undocumented processes of how the employer’s business really runs.
Companies that outsource the worker bees while retaining management as employees have the “stuck in meetings all day” problem. It’s amplified by the corresponding problem of unsupervised contractors performing suboptimal work, such as doing things that worked at their last job, but don’t work at the current job.
But yes, contractors who have worked at a single job for more than 6 months are more like employees, should be subject to the WARN laws.
FYI, many dirtbag companies do smaller waves of layoffs to circumvent the laws. It’s very popular and profitable.
15k people laid off in the SF/Bay Area may not sound like a lot (unless you are one of them) but these are mostly very well paid jobs that are probably the few people that can afford a home in the area. If 20% of the people decide to list their house, then that would add 3,000 new house listings. Per the latest monthly CAR report (slide 49), there were 2,874 active listings in the SF/Bay Area in Dec 2022 so that would double the listings almost overnight. That 20% figure may be high but the point is that these cuts may have a serious impact to the housing market if people decide to sell since the market is determined at the margins. Not to mention other sectors that will be impacted but the reductions in spending of those households as they look for new jobs.
Good points. If we figure each layoff at $100,000 minimum in salary and benefits (no doubt very very low), that’s $1.5 billion in lost salary and wages. Probably a drop in bucket, but maybe not.
There will be knock-on effects to these layoffs too. Hiring freezes, other execs tightening their spending as they wonder if they’re next, etc. And if you’re looking to sell your home to de-lever, maybe it’s best to hurry: there’s already been a 30% drop in housing prices in the Bay Area. Why wait until it’s half off? And if you’re a buyer, why not wait?
Still in the first inning, all around. Wolf’s YouTube update argued that as advertising spending drops, social media and tech companies will be hard hit.
Ya, we’re in the early innings of this.
All this tells is that Q1 results will suck. The big funds owning these companies will give them 1 of 2 choices:
1. Use all cash to buy back shares to compensate investors.
2. Cut employees by 20% to 25%.
So expect more layoffs to follow. Also search Google for “hohn letter to sundar pichai november” and “hohn letter to sundar pichai”
There’s a new tax on buybacks in 2023.
As well the predicted collapse of zombie businesses. Are these bankruptcies nearing zero hour?
In an economics course in college we were taught that there is a multiplier effect. Every job created with full benefits creates 3 more jobs.
Life experience has shown me that taxation reduces this multiplier, because taxes harvests off wealth that supports that multiplier. But I would say that today a 2x multiplier still applies. So these layoffs are significant as they work their way through the local economy.
Seems like 2 year bond market changed after the election results with yields going down. I assume market is expecting a 2023 recession as the big fiscal stimulus is off the table with a divided D.C.
With Fed tightening and the money dump diminishing companies anticipate what is coming. But market may be pricing in wrong future. Might be better or worse than market is pricing in or the Fed is forecasting.
I heard that in bay area a single well paying hi tech job support many jobs downstream..
So the domino effect is bad.
You’re right about all the hoopla and these numbers being hyped by the media. All of the American Airlines flight attendants were given the option to transfer to another base, so technically, they weren’t laid off and like you pointed out about tech workers, many flight attendants don’t actually live in the state they’re based and commute to work.
At LAX, a section of the employee parking lot, near the southernmost runway, is dedicated to airline employees that live out of their vehicles.
“…employees that live out of their vehicles…”
I’m trying to understand the concept and can’t, so perhaps you can help me out? There is no bed in a vehicle. There is no bathroom in a vehicle. There is no kitchen or refrigerator. There is no running water. There is neither heat nor air conditioning in a vehicle unless it is actually running. There is no insulation in a vehicle. You cannot even stand up to dress in a vehicle. Again, please help me out with this concept “living in a vehicle,” because it’s faulty. Cars are transportation, not housing. Not even close.
I’ve lived in my car. More than once. Lots of people have. I don’t recommend it and I hope you never have to endure it. But, make no mistake, it’s a thing.
Do you really seriously think people don’t live out of their vehicles?
If you are serious, here’s some answers. They pee either in a jar or outside near some bushes. They wash up and get dressed in public restrooms. They smuggle those pee jars into the bathrooms and dump them then rinse them out. They eat less perishable items or eat out or just buy milk for cereal every day. They recline the seats and pile on the blankets and freeze their butts off at night.
Back in the day, we had a warehouse employee who lived in his car that he parked on the company parking lot.
He had a garnishment (child support) on his paycheck that didn’t leave him enough to rent even a dingy place. He did that for quite a while, but eventually got it taken care of and was able to move into an apartment.
Don’t get me wrong. I have slept in my truck(s) many a night over the years, for varying reasons; mostly because I don’t want tens of thousands of dollars of tools stolen while I thought I was getting a good night’s rest in a comfy bed instead of an agonizingly uncomfortable seat which was never designed to sleep on.
But my point was that a car is not, in my opinion, an acceptable form of housing. And I’m just not on board with the whole “just live in a car” thing. Again, I’ve slept in a truck dozens of times over the years, but the sleep was always, ALWAYS horrible, and the thought of living in one is too depressing to consider. Almost anything would be better. I’d honestly rather set up a tent.
Not good, but better than at 47th and Cicero Avenue outside of Midway.
This is the kind of news that makes the reader comments on this site the best economic education the USA has to offer.
I have tenants who work in tech and I’m always surprised at how much money they make. It seems too much compared to more valuable members of society (nurses etc..). But then it hits and …..it’s gone. They also get replaced easily.
There’s also a noticeable increase in mortality these days. Gee I wonder why. So it will even out eventually.
We live in a kind of strange twilight when it comes to price discovery on the real value of labor. This isn’t just an oddity of capitalism, either; drive around Havana, Cuba and you’ll see that the nicer homes out on the coast are all reserved for politicians, sports players, dancers and other local celebrity types.
Tech workers make nothing when you think about the myriad of non-critical workers in labor markets which are almost discretionary when you come right down to it. Look at what the louche little cretins in finance rake in. Then you have professional sports players, state and federal politicians and the compensation packages/golden parachutes of any of the goon squads in most C suites. What about contract lawyers? There was some law nerd on here bragging about making between 6K and 1 mil annually. On a planet already totally grossly over-lawyered, what in the hell special wrinkle do you think makes anyone say, “yeah — that sounds like a fair price” — what is the price discovery process on something like that? It’s gross.
Meanwhile, I know of two biophysicists in Houston who have been actively working toward developing cures for terminal illnesses who have to all but beg for grant money every five years.
Anyone who thinks a particular profession is paid too little can hire them at above market clearing compensation. Some do privately, but not otherwise.
I remember about 55 years ago when there would always a kid in the schoolroom who knew how to work the film strip projector better than the teacher.
Sure, there are probably kids who can use the computer better than the teacher. But can they teach (manage different classes, get all the students learning, make boring material enjoyable, take account of the differing needs of all the students in class – including those with special needs, and transmit information to the children in an effective way).
The answer is no, by the way.
Good point about lots of layoffs are not even in the USA.
However these large operations like meta also presumably are cutting other expenses like free lunch and training consumables etc etc.
So many of these other companies listed with layoffs are affected by loss of income from the tech budgets. Also loss of income from the folks layed off.
Any way not going to lose much sleep about this myself. It is a bummer for those getting the pink slips.
There was a lot of electronic pixels wasted on how these jobs were the jobs of tomorrow. They were going to be the substitute for the jobs lost in manufacturing. They turned out not to be true. Also, there was a lot of moaning about high prices for real estate in the SF Bay Area. Now, with these people who now have to sell to move to another region to find another job, now homes will be affordable.
BTW, no one has answered whether Amazon will create the promised 25000 fantom jobs in VA. Also, there was a talk of Apple building another space ship in NC? what happened to those plan? Inquiring minds want to know.
Amazon is spending $35B on their data centers in VA with at least 1000 jobs expected.
It’s often mentioned that the announced layoffs are small compared with the large expansion, and that many layoffs are not at HQ or even in the US, but the same is true of the expansionary phase(s). And if layoffs are in large part for cost savings, how much sense does it make to lay off outside the US (or Europe) where costs are much higher?
* much lower
Seeing posts on financial forums about people who got laid off from their $5-600k tech jobs in SoCal, and they all seem pretty despondent that they won’t be able to find anything making even close to that salary. Of course lifestyle inflation being what it is they’re all asking do they sell the house they can no longer afford, or ride it out until they go down with the ship.
I was always questioning how these software engineers create enough value to justify their high salaries. Maybe they never did.
These numbers are not entirely accurate. My SF company of 300 people laid off 30 engineering and product roles last week, all of them contractors in the city. Those people won’t show up in any stats because they don’t qualify for unemployment and our company wasn’t required to let anyone know.
Facebook, Google, Apple etc employ thousands of local contractors, especially for highly qualified roles. I know because I work in tech and have gone through it. In fact, Apple strongly prefers contractors over FTE as they use the promise of a Full time role as a carrot.
When these companies do employ foreign contractors it’s in places like Mexico, Spain etc, to staff their customer call centers.
Contractors are gig workers. They’re self-employed. They don’t get laid off. They lost a client, and now they have to hustle to find another client. That’s the normal procedure for self-employed workers – whether this is software development or lawncare. They might already be working on another project for another company.
There are some self-employed people here in the comments who’ve been talking about this for years. It’s not for everyone. But people who’re good at lining up new business like it.
Not all contractors are self employed, some elect to go W-2 via their recruiter/contractor firms. These contractors are billable to the client by the hour and receive their hourly rate, reduced by taxes, and medical deductions. These contractors do qualify for unemployment because they are essentially employees of the placement firm.
The “contractors” you mention that are actually employed (W-2) by some other company that has a contract with, for example, Meta to take care of Meta’s buildings, they’re NOT contractors, but employees. And when they get laid off because their company lost the contract with Meta, they show up in the WARN listings under the name of their company.
In the WARN list above, there are two such contracting firms that I could easily identify. They lost their deal with Meta. The list above probably includes several other contracting firms that laid off people because they lost their deal with any of the other tech and social media companies.
The two Meta contracting firms included the WARN filings above that I could easily pick out are:
— ABM Industry Groups dba Meta: laid off 368 employees
— Flagship Facility Services at Meta: laid off 126 employees
The companies you mention provide a service as subcontractors, this is not what I was talking about. There are “temp” recruiters out there in the tech world which place tech workers on contracts for short periods and provide W-2 options for those workers that don’t want to be “self employed.” Some of these recruiters are big public companies.
So once again, the chicken littles are proven wrong.
Actually theyre more like parrot littles since all most folks do is mindlessly repeat the headlines of the day without ever engaging their brains or doing any independent research the way Wolf does.
“Polly want a crash?”
Why did chicken-little cross the road?
…trying to get out from under the sky…
may we all find a better day.
Its because commercial programming requires attention from somebody of probably slightly above average intelligence while being also deadly boring, while also being entirely devoid of any value from experience.
The reason why they are despondent is that for all the mooted shortages, tech is an incredibly competitive field. There are no restrictions on tech visas in the western world pretty much. These guys who are laid off have 6 months to get back in or they will really struggle. I know a movie cameramen, a bus driver, a wedding photographer, a physiotherapist, a marketing guy all developers back in the day. Plus the whole day to day work of development, to me at least, seems designed to burn you out. Its not unlike Amazon’s warehouse jobs, they make no attempt to retain staff and know they all drop out within the year, but plenty of other suckers.
The catastrophic zero value produced by most failed start-ups is compensated for (or was) by being in the game with massively successful lottery type wins for the odd winner. I know that for me, code I’ve been paid well to produce has mainly gone to “product heaven”. I regret getting into it and I’m sure I’m not alone, so without the high salary hey ok I’ll do something nicer. You would arguably be better off with a burger van in a good location.
If I had known that there’s 500K a year to be made I would not have dropped out of college (when I learned to dislike programming as we called it at the time). From my perspective I could work for 1 year and lounge on a beach for 4 years to make the same amount I make now except now I have be at work all the time.
For every $500K software engineer role (of which much of that compensation is stock. Nobody makes $500K cash as a SWE), there are 30 low level IT, testing, and boring analyst/programmer jobs that pay far, far less.
There’s a wide delta between a senior SWE at Google working on a product with a billion daily users, and Joe Dan IT Guy who installs software on user machines at a regional credit union for $45K a year.
I read the tech help wanted ads from time to time. My favorites are when they expect to find programmers that have 10+ years experience coding databases like SQL or AWS. Who does that for 10 years?
have been programming SQL for 20 years in the energy business just the number of programmers was very small. Generally less than 1 percent. The number of employees in the energy business is usually under 4 percent of OPEX as well so total numbers are miniscule. You are right about the small number of folks with 10 plus years and if the need is there they rewrite the add.
It looks like much of the mundane programming will be done by ChatGPT3/4, a large language model (neural net) or similar AIs. It is astonishingly good. Check it out.
With the event of these LLMs, I see white collar workers increasingly being commoditized. Not what we expected just a few years ago. However, hands on service (replace water heater, A/C, car repair, etc) will become unaffordable for many people and a good career for many.
They earned their salaries all right. They made all these tech companies worst, in return for a short term gain! What more could you ask?
Thanks for the real stats Wolf. Doubt these will make Mainsteam media. I am so cynical about Wall Street pumping the “tech layoff” story. As soon as raised by Bubble Vision, the financial talking heads are calling for a pivot, cutting rates, and ending QT. Give Wall Street lots of money and they will save the economy and provide life savers for Tech workers, mortgage holders and investors. What a bunch of self serving prattle. Just another scam to fleece the public.
These layoff numbers are probably about the same around Seattle. The hype is on to knock back the job market to comfortable pay levels and few benefits.
Many a retail and fast-food giant has been built on the business model of crappy pay and part-time labor.
I hope the job market hangs on this time. Fast food seems to be hiking prices for higher profits, lower volume like car dealers.
…perhaps ‘higher profits, lower volume’ an indicator of an economy reaching a point of being ‘overserviced’?
may we all find a better day.
Fast food jobs are “low skill”. It’s also supposed to be a temporary job, not a career unless in management.
That’s the problem, not the pay for jobs that used to be substantially for high schoolers and college students.
The bigger problem is government currency debasement. That’s certainly not any employer’s fault. Without “printing”, no long-term inflation absent some natural or other government induced disaster.
It’s not the nominal wage that matters, it’s what it buys. Read blogger Charles Hugh Smith. He has occasionally profiled how menial jobs used to be able to pay the bills, before financialization took over the economy and so many things became so ridiculously expensive.
“[Fast food is] supposed to be a temporary job, not a career unless in management.”
Where is this written?
“That’s the problem, not the pay for jobs that used to be substantially for high schoolers and college students.“
You’re framing a seductively simple narrative here with lots of hasty suppositions.
Accepting that Fast Food work — and let’s extend that out to include barristers, short-order cooks and servers/bartenders (which is to say nothing of cashiers, bus drivers, daycare workers) may not enjoy the most lofty or covetous rungs in the labor pool, it is still miles more critical and provides more real utility than a lot of the BS vocations one might regard as proper careers. The remuneration should better reflect that — and thankfully we can see that there’re baby steps toward that.
It’s not all flunkies & high-schoolers doing this work, either. There are terrifically intelligent, stable, capable men & women who work these types of jobs to underwrite their avocations; these are creative types who maybe want to preserve their mental bandwidth for their art, rather than exhaust themselves in some assgrinder having their brainfolds harnessed & steamed as flat as the broadside of a piggy bank day in/day out.
Baristas — not barristers
“Fast food jobs are “low skill”. It’s also supposed to be a temporary job, not a career unless in management.”
Our service sector economy is loaded with these “low skill” jobs you cite, and there have always been people who have needed to support themselves off of them regardless of their age.
Not everyone is cut out for college. When you factor in that 46% of all people are of below average intelligence (less than 100 IQ), it says a lot about who can do what. I’m not saying these people cannot learn a skill, but expectations of what they will be able to achieve should be realistic.
All jobs should be able to provide a person with the income needed to support oneself. Should a McDonald’s worker be able to afford an oceanfront estate? Of course not. In fact, it’s probably not a job that would ever lead to home ownership, unless somebody was frugal for decades and saved up, but it should most certainly afford a person a modest small studio or 1 bedroom apartment, and the most basic of life’s necessities.
Yet, we are so far removed from that it’s sickening. And it goes far beyond money-printing. Part of the reason is that the government has allowed employers to drive down wages by importing 3rd world workers who are used to living in squalor, and by allowing them to pay poverty level wages while the working poor still collect food stamps, Section 8 housing vouchers, etc. to make up the difference. The entire system is rigged for the wealthy at the expense of the middle class and the poor.
Well written. And the extreme of this combined with permitting rampant speculation in basic needs has made our public spaces full of homelessness a worldwide embarrassment and shame over the past 20 years.
If it were not for zoning and building codes the US would look just like Mexico city and it’s corrugated steel and cardboard outskirts.
Thank you, Depth Charge. That needed saying. The casual disregard for the lived experience of working people in America is not a sign of a healthy society.
Sounds to me that there’s plenty of room to raise rates and ramp up QT.
There are very few startups with more than 75 people. I wonder about those numbers and how many were/are first time home buyers.
You’d be surprised how quickly a startup gets to 75 people (Although maybe not all in the Bay Area). It’s not uncommon to hit that number by your series A, and definitely by your series B. Those are still considered pretty early stage startups.
I think the carnage in startups won’t start for another 6-12 months. Most startups are on an 18-24 month funding cycle, i.e. either they grow enough in that time to do another funding round, or they run out of cash and go under. Either way, they budget their cash to last those 2 years before the next round comes in.
Funding slowed down around Q1 22, so it’s been less than a year. Anyone who was lucky enough to finish their funding before then has enough cash to last for another year or so (and longer; now that everyone knows funding is tight, people are making their budgets stretch longer). And ones who would have been funded after Q1 22 are probably still stretching their budgets to keep the lights on while they keep trying to secure funding.
IMHO, we’re not going to see real carnage of startups running out of money and closing up shop for another 6 months or so, when the weakest startups run out of money even after stretching budgets as much as they can.
Check out the stats on the decimation of small businesses by COVID. Small businesses that creat the vast majority of new jobs.
Excellent Mr Wolf
This research connects to a recent thesis from an analyst who recently suggested the recession has been delayed, by a wide spectrum of hone construction companies that haven’t laid off worker bees.
His thesis is that this companies have been reluctant to dump people, because they anticipate being able to maintain profitability through a recession.
This type of resilient thinking is also reflective of a recent news letter from an investment firm (fisher) which said all this stuff is priced in.
That same firm told investors repeatedly last year to not look at their quarterly statements.
At this stage, looking ahead with a resilient attitude fits a scenario where current ambiguity related to Fed pivots and soft landings, but that outlook overlooks the extreme risk ahead within the next four months.
The decreased inflation trend apparently is amplifying a belief in many people that the market Casino is about to explode with profitability and new all time highs, while on the other hand, there’s a long string of economic concerns unfolding that will cause a serious global meltdown.
I think the opinion that influences me most, is the Fisher concept, to look away and pretend the party is somewhat delayed and that you have to accept that prices are baked in.
That opinion seems so far off a d disconnected from reality that’s it’s simply incredible that people pay high fees linked to poor performance, paying to be sent a newsletter that tells them that everything is fine.
I think that same mentally is at work within the data in this Wolf research, I think there’s a disconnect in layoffs, which amounts to hesitation to act. It’s understandable that people and companies are caught up in uncertainty and it’s understandable that nobody is fully committed to where things will stand in 4 weeks, 4 months or a year from now.
That hesitancy is going to be resolved slowly in the next few months, very much like waiting for a massive weather event. As such, preparation is critical in terms of planning ahead, versus looking away with ignorance
If the storm passes, perhaps many things will return to normal, but if you’re not prepared to be obliterated, there will be serious life changing consequences.
I think the Harry Dent-types have immunized people from negativity. He has predicted collapse and worldwide depression for maybe over 15 (?) years now. Eventually everyone stops listening and they dismiss any negative opinions.
The pandemic, certainly inflated a pollyanna bubble, where everyone was immune to the virus of greed.
There were numerous economic gurus building caes about inflation and doom, while virtually every asset class went parabolic.
The mass hysteria still hasn’t really faded and if anything there’s a huge effort to get that party fired back up, and dismiss people that found the religion of reason. Obviously, many are resisting baptism…
One of the greatest pieces of advice FYI:
The Dow Jones Industrial Average increased six-fold from sixty-three in August 1921 to 381 in September 1929. After prices peaked, economist Irving Fisher proclaimed, “stock prices have reached ‘what looks like a permanently high plateau.’” 1
A lot of forecasters can’t imagine the amount of creative can kicking a sovereign country can do. Like during GFC when banks were bankrupt under mark to market powers that be changed accounting rules to mark to fantasy.
Who could have conceived $17 T in negative rates? Who could have thought Fed would monetize $4 T in debt?
1) GOOGL and AAPL : zero plus zero layoffs. They might be hiring young bright tech, out of college, at lower wages, to replace normal attrition.
2) AMZN : 263, but MSFT and AMZN are based in Seattle.
3) CA mass happiness cont, but things might change.
4) QQQ : yesterday bar kissed dma200 from below. QQQ reached a supply line coming from Sept 12 high to Dec 13 high, a black candle. The ma50 crossed the dma200 in Mar.
5) AAPl might gyrate above Sept 12, but if it can’t, bad things can happen.
They can’t layoff in the Bay Area coz they can never fill that position again. No one will go there.
What is the number of layoffs that constitutes a “mass layoff”, for the purpose of this reporting? Is that number for how many are let go in CA or how many the company is getting rid of in total? Like if a company let go 1000 people but only 5 are in CA would that be reported?
WARN reporting goes by job site/address. So at each office that Meta has, where it is laying off people, it has to report it to WARN, by office location. If you work for Meta, your office may be on Howard St. in San Francisco, but you might work from home in Nevada. The WARN report shows your layoff as occurring at the Meta office on Howard St in San Francisco.
For example, WARN showed that Meta laid off:
# of people — address of office:
362 — 250 Howard St., San Francisco CA
67 — 311 Airport Blvd., Burlingame CA 94010
32 — 312 Airport Blvd. Burlingame CA 94010
34 — 322 Airport Blvd. Burlingame CA 94010
46 — 333 Airport Blvd. Burlingame CA 94010
85 — 1 Hacker Way Menlo Park CA 94025
32 — 10 Hacker Way Menlo Park CA 94025
139 — 12 Hacker Way Menlo Park CA 94025
241 — 15 Hacker Way Menlo Park CA 94025
140 — 17 Hacker Way Menlo Park CA 94025
142 — 105 Constitution Dr. Menlo Park CA 94025
60 — 135 Constitution Dr. Menlo Park CA 94025
632 — 260 Constitution Dr. Menlo Park CA 94025
77 — 162 Jefferson Dr. Menlo Park CA 94025
94 — 200 Jefferson Dr. Menlo Park CA 94025
98 — 900 Discovery Way Sunnyvale CA 94089
139 — 1180 Discovery Way Sunnyvale CA 94089
I wonder how these tech workers were notified that they were laid off? Is there a robo program that takes the names and sends a mass e-mail to all the terminated victims? I once took a course on the subject of how to fire an employee. One of the main themes of the course were to tell the employee that this was a career enhancing opportunity. What a pile of BS.
I have to hand it you Wolf; getting facts correct goes a long ways to formulating a credible, respectable and useful opinion.
So, essentially, there is an updraft in the numbers of imminently illegal personnel in the USA …
The way tech hacks the truth the reality is you must be vigilant every moment in every way….
Tech sees the data and knows the truth….
Keeping us from it and not know how it works bleeds us all
The anxiety keeps us all coming back here to make sense of it all….
Like solving a rubic’s cube…. Just keep turning and twisting and still you will find nothing but anxiety….
If builders built buildings like techies build programs, the first woodpecker that came along would destroy civilization.